U.S. Energy Corp. Announces Bolt-on Acquisition of Assets
May 03 2022 - 4:15PM
U.S. Energy Corp. (NASDAQCM: USEG) (“U.S. Energy”
or the “Company”) today announced that the Company has acquired
operated oil and gas producing properties in an all-cash
transaction (the “Transaction”). The Properties (the “Properties”)
are located primarily in Liberty County, TX adjacent to the
Company’s existing assets in the area.
Acquisition Highlights
- Proved Developed Producing (“PDP”)
PV-10 estimated at $2.3 million.
- PDP reserves estimated at
approximately 88,510 barrels of oil.
- Includes the Panther City Pipeline
and associated infrastructure.
- Approximately 1,022 net acres which
are 100% held by production.
- Transaction effective date of April
1, 2022.
- Purchase price of $1.0 million in
cash.
“We are pleased to announce our most recent
acquisition, which furthers U.S. Energy’s stated strategy of
consolidating assets that represent positive cash flowing
properties in existing Company areas that hold significant upside
potential,” said Ryan Smith, Chief Executive Officer of U.S.
Energy, who continued, “The Properties are being purchased at a
substantial discount to their current PDP PV-10 reserve value while
adding long lived oil reserves and immediate free cash flow to the
U.S. Energy portfolio. Combined with our current infrastructure in
the area, the acquired Properties contain numerous candidates for
highly economic return to production opportunities from existing
wells. Importantly, with U.S. Energy’s acquisition of the Panther
City Pipeline, there is additional upside from near-term gas sales
and moving third party gas volumes, improving both the economics
and environmental impact of the entire area. U.S. Energy’s latest
acquisition is yet another example of the Company taking advantage
of our low-cost corporate structure and clean balance sheet to
acquire assets at attractive valuations while using our expertise
to realize economic upside and improve the environmental footprint
in the areas in which we operate.”
Acquired Properties Overview
As of April 1, 2022, the Properties had total
estimated Proved Developed Producing reserves of approximately
88,510 barrels of oil and had a present value of estimated future
net revenues before income taxes discounted at 10% (“PV10”) value
of approximately $2.3 million. The Properties are operated with a
97% working interest and 69% net revenue interest. The Properties
also contain approximately 1,022 net acres which are 100% held by
production.
The consideration payable for the assets is $1.0
million in cash which is being funded from U.S. Energy’s existing
cash on hand.
|
|
Estimates for Propertiesas of April 1, 2022** |
Proved Developed Producing Oil Reserves (Bbls) |
|
|
88,510 |
|
Proved Developed Non-Producing Oil Reserves (Bbls) |
|
|
- |
|
Total Proved Developed Oil Reserves (Bbls) |
|
|
88,510 |
|
|
|
|
PV10 ($000’s)* |
|
$ |
2,254 |
|
*Strip Pricing as of April 2, 2022.**Company’s internal engineering
as of April 1, 2022. |
About U.S. Energy Corp.
We are a growth company focused on consolidating
high-quality producing assets in the United States with the
potential to optimize production and generate free cash flow
through low-risk development while maintaining an attractive
shareholder returns program. We are committed to ESG
stewardship and being a leader in reducing our carbon footprint in
the areas in which we operate. More information about U.S. Energy
Corp. can be found at www.usnrg.com.
Forward-Looking Statements
Certain of the matters discussed in this
communication which are not statements of historical fact
constitute forward-looking statements within the meaning of the
federal securities laws, including the Private Securities
Litigation Reform Act of 1995, that involve a number of risks and
uncertainties. Words such as “strategy,” “expects,” “continues,”
“plans,” “anticipates,” “believes,” “would,” “will,” “estimates,”
“intends,” “projects,” “goals,” “targets” and other words of
similar meaning are intended to identify forward-looking statements
but are not the exclusive means of identifying these
statements.
Important factors that may cause actual results
and outcomes to differ materially from those contained in such
forward-looking statements include, without limitation, risks
associated with the integration of the recently acquired assets;
the Company’s ability to recognize the expected benefits of the
acquisitions and the risk that the expected benefits and synergies
of the acquisition may not be fully achieved in a timely manner, or
at all; the amount of the costs, fees, expenses and charges related
to the acquisitions; the Company’s ability to comply with the terms
of its senior credit facilities; the ability of the Company to
retain and hire key personnel; the business, economic and political
conditions in the markets in which the Company operates;
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; risks
associated with COVID-19, the global efforts to stop the spread of
COVID-19, potential downturns in the U.S. and global economies due
to COVID-19 and the efforts to stop the spread of the virus, and
COVID-19 in general; economic uncertainty relating to increased
inflation and global conflicts; the lack of capital available on
acceptable terms to finance the Company’s continued growth; and
other risk factors included from time to time in documents U.S.
Energy files with the Securities and Exchange Commission,
including, but not limited to, its Form 10-Ks, Form 10-Qs and Form
8-Ks. Other important factors that may cause actual results and
outcomes to differ materially from those contained in the
forward-looking statements included in this communication are
described in the Company’s publicly filed reports, including, but
not limited to, the Company’s Annual Report on Form 10-K for the
year ended December 31, 2021. These reports and filings are
available at www.sec.gov.
The Company cautions that the foregoing list of
important factors is not complete. All subsequent written and oral
forward-looking statements attributable to the Company or any
person acting on behalf of any Sale Agreement Parties are expressly
qualified in their entirety by the cautionary statements referenced
above. Other unknown or unpredictable factors also could have
material adverse effects on U.S. Energy’s future results. The
forward-looking statements included in this press release are made
only as of the date hereof. U.S. Energy cannot guarantee future
results, levels of activity, performance or achievements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Finally, U.S. Energy undertakes no
obligation to update these statements after the date of this
release, except as required by law, and takes no obligation to
update or correct information prepared by third parties that are
not paid for by U.S. Energy. If we update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
Corporate Contact:
U.S. Energy Corp.
Ryan Smith
Chief Executive Officer
(303) 993-3200
www.usnrg.com
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