U.S. Energy Corp. (NASDAQCM: USEG) (“We”, “U.S.
Energy” or the “Company”) today announced financial and operating
results for the first quarter ended March 31, 2022.
Quarterly Highlights and Recent
Developments
- Oil and gas revenues of $8.9
million, an increase of 633% from the comparable period of
2021.
- Production of 120,712 barrels of
oil equivalent (“BOE”), or daily production of 1,341 BOE per day
(“BOEPD”), an increase of 366% from the comparable period of
2021.
- Adjusted EBITDA1 of $4.1
million.
- Closed transformational and highly
accretive acquisition of operated, oil-weighted assets from
multiple parties on January 5, 2022.
- Advanced ESG initiatives, including
the implementation of gas gathering systems to continue reducing
the Company’s environmental footprint as well as the initiation of
a proactive plugging and abandonment program on targeted
assets.
Management Comments
“The first quarter of 2022 represented the
achievement of numerous milestones for U.S. Energy as we continue
to build on the success realized in 2021,” said Ryan Smith, U.S.
Energy’s Chief Executive Officer. “U.S. Energy began the quarter
focused on the integration of our transformational acquisitions and
we delivered strong results which reflect the success of our
consolidation strategy and ability to acquire and develop producing
assets. Our strong balance sheet and significant cash flow
generation also allowed U.S. Energy to introduce a formalized
shareholder returns plan, resulting in the initiation of a
sustainable dividend that is planned to continue going forward. As
we progress through 2022, U.S. Energy is committed to furthering
its track record of accretive growth, disciplined capital
allocation, and upside realization from acquired assets to continue
driving meaningful shareholder value.”
First Quarter 2022 Production
Update
For the three months ended March 31, 2022, we
produced 120,712 BOE, or an average of 1,341 BOEPD, as compared to
25,905 BOE or 288 BOEPD during the comparable period in 2021. U.S.
Energy’s production growth has primarily been driven by the
integration of operated assets acquired in January 2022 and the
Company’s efforts in optimizing legacy production operations.
|
1st Quarter
2022 |
|
|
1st Quarter
2021 |
|
Sales Volume (Total) |
|
|
|
|
|
Oil (Bbls) |
|
90,821 |
|
|
|
21,872 |
|
Gas and
liquids (Mcfe) |
|
179,343 |
|
|
|
24,195 |
|
Sales
volumes (Boe) |
|
120,712 |
|
|
|
25,905 |
|
|
|
|
|
|
|
Average Daily Production (Boe/d) |
|
1,341 |
|
|
|
288 |
|
|
|
|
|
|
|
Average Sales Prices |
|
|
|
|
|
Oil
(Bbl) |
$86.25 |
|
|
$51.74 |
|
Gas and
liquids (Mcfe) |
$5.79 |
|
|
$3.27 |
|
Barrel
of Oil Equivalent |
$73.50 |
|
|
$46.74 |
|
Estimated Proved Reserves at April 1,
2022 at SEC Pricing
As shown in the table below, the Company's
estimated proved reserves at April 1, 2022, which were prepared in
accordance with Securities and Exchange Commission ("SEC")
guidelines by an independent petroleum engineering firm, were
approximately 6,880 Mboe with a present value of estimated future
net revenues before income taxes, discounted at 10% (“PV-10”) of
$131.0 million at April 1, 2022 using current SEC pricing of $75.24
oil and $4.09 natural gas.
|
|
As of 4/1/2022SEC Pricing
(1) |
Proved Developed Oil Reserves (“PDP”) (MBbls) |
|
|
4,750 |
Proved
Developed Non-Producing Oil Reserves (“PDNP”) (MBbls) |
|
|
600 |
Total
Proved Oil Reserves (MBbls) |
|
|
5,350 |
|
|
|
Proved
Developed Gas Reserves (MMcf) |
|
|
9,123 |
Proved
Developed Non-Producing Gas Reserves (MMcf) |
|
|
50 |
Total
Proved Gas Reserves (MMcf) |
|
|
9,173 |
|
|
|
Total
Proved Reserves (MBoe) |
|
|
6,880 |
|
|
|
PDP Reserves PV-10
(000’s) |
|
$110,608 |
PDNP Reserves PV-10
(000’s) |
|
$20,388 |
Total PDP and PDNP Reserves
PV-10 (000’s) |
|
$130,996 |
11q2022 SEC pricing of $75.24 oil and $4.09
natural gas
First Quarter Ended March 31, 2022
Financial Results
Revenues from sales of oil and natural gas
during the first quarter of 2022 were $8.9 million compared to $1.2
million during the comparable period of 2021. The change in revenue
was primarily attributable to an increase in oil production volumes
from the properties acquired in January 2022 and an improvement in
realized commodity prices. Revenue from oil production represented
88% of our revenue during the quarter.
During the first quarter of 2022, we realized an
average oil sales price of $86.25 per Bbl and an average gas and
liquids sales price of $5.79 per Mcfe for an overall average sales
price of $73.50 per BOE compared to an average oil sales price of
$51.74 per Bbl and an average gas and liquids sales price of $3.27
per Mcfe for an average sales price of $46.74 BOE during the
comparable period of 2021.
During the quarter, we incurred approximately
$3.3 million in capital expenditures. This amount primarily
consisted of the Company’s efforts in returning to production wells
acquired in recent transactions, the participation in newly drilled
non-operated well development, and the acquisition of producing
properties during the quarter.
Lease operating expenses during the first
quarter of 2022 were $2.7 million compared to $0.6 million during
the comparable period of 2021. The increase in lease operating
expenses was due to increased activity as the result of the
properties acquired in January 2022.
General and administrative (“G&A”) cash
expenses totaled $1.4 million during the first quarter of 2022,
primarily related to increased employee headcount following the
Company’s January 2022 transaction. Non-cash stock-based
compensation totaled $1.5 million for the quarter.
Net loss was $3.4 million and Adjusted EBITDA
was $4.1 million for the first quarter of 2022. Adjusted EBITDA is
a non-GAAP financial measure and is reconciled to GAAP below.
First Quarter Ended March 31, 2022
M&A and Subsequent Activity
On January 5, 2022, U.S. Energy closed its
previously announced acquisition representing a diversified
portfolio of operated, oil-weighted assets located across the
Rockies, West Texas, Eagle Ford, and Mid Continent. The total
transaction consideration, including assumption of liabilities and
transaction costs, was $88.7 million with an effective date of
January 1, 2022.
On April 5, 2022, the Company sold certain
properties in Osage County, Oklahoma. Proceeds from the sale of the
properties were $1.4 million with an effective date of March 1,
2022.
On May 3, 2022, the Company acquired operated
oil and gas producing properties in Liberty County, Texas, adjacent
to its existing assets in the area, for $1.0 million in an all-cash
transaction. The effective date of the transaction is April 1,
2022. The producing, oil-weighted assets include the Panther City
Pipeline and associated gas gathering infrastructure.
Dividend Initiation
Consistent with U.S. Energy’s stated strategy of
meaningful capital returns to shareholders, on March 28, 2022, the
Company’s board of directors declared a $0.0225 per share dividend
for shareholders of record as of April 15, 2022. The dividend was
paid by U.S. Energy on May 2, 2022. Subject to board approval, U.S.
Energy intends to pay a quarterly dividend on a continuing
basis.
Current Liquidity Position
On March 31, 2022, the Company had approximately
$1.5 million in cash, $3.5 million in outstanding debt, and $11.5
million available under its current credit facility borrowing
base.
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; drilling, completions,
workovers and other activities and the anticipated costs and
results of such activities; the Company’s anticipated operational
results for 2022 including, but not limited to, estimated or
anticipated production levels, capital expenditures and drilling
plans; acquisition risks; liquidity and capital requirements; the
effects of governmental regulation; anticipated future production
and revenue; drilling plans including the timing of drilling,
commissioning, and startup and the impact of delays thereon;
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. Without limitation of the foregoing,
future dividend payments, if any, and the level thereof, are
uncertain, as the Company's dividend policy and the funds available
for the payment of dividends from time to time is dependent upon,
among other things, free cash flow financial requirements for the
Company's operations and the execution of its growth strategy,
fluctuations in working capital and the timing and amount of
capital expenditures, debt service requirements and other factors
beyond the Company's control. Further, the ability of the Company
to pay dividends will be subject to applicable laws (including the
satisfaction of the solvency test contained in applicable corporate
legislation) and contractual restrictions contained in the
instruments governing its indebtedness.
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 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.
Reserve Information
Reserve engineering is a process of estimating
underground accumulations of oil and natural gas that cannot be
measured in an exact way. The accuracy of any reserve estimate
depends on the quality of available data, the interpretation of
such data and price and cost assumptions made by reservoir
engineers. In addition, the results of drilling, testing and
production activities may justify revisions of estimates that were
made previously. If significant, such revisions would change the
schedule of any further production and development drilling. In
addition, the results of drilling, testing and production
activities may justify revisions of estimates that were made
previously. If significant, such revisions could impact the
Company’s strategy and change the schedule of any further
production and development drilling. While we believe these
estimates and the assumptions on which they are based are
reasonable as of the date on which they are made, they are
inherently uncertain and are subject to, among other things,
significant business, economic, operational, and regulatory risks,
and uncertainties, some of which are not known as of the date of
the statement. Guidance and estimates, and the assumptions on which
they are based, are subject to material revision. Accordingly,
reserve estimates may differ significantly from the quantities of
oil and natural gas that are ultimately recovered and/or as
disclosed herein. The reserve information in this press release,
including standardized measure and PV-10 are preliminary estimates
that have not yet been audited or reviewed and are subject to
material revision. These are estimates that should not be regarded
as a representation. Investors should not place undue reliance on
these estimates. The reserves and PV-10 estimates discussed herein
are based on an internal reserves report prepared on April 1, 2022,
with estimated valuation information based on SEC pricing as of
April 1, 2022 of $75.24 oil and $4.09 natural gas.
Financial Statement Presentation and
Reconciliation
U.S. ENERGY CORP. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(in thousands, except share and per
share amounts)
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and equivalents |
|
$ |
1,447 |
|
|
$ |
4,422 |
|
Oil and natural gas sales receivable |
|
|
4,270 |
|
|
|
933 |
|
Marketable equity securities |
|
|
272 |
|
|
|
191 |
|
Prepaid and other current assets |
|
|
771 |
|
|
|
179 |
|
Real estate assets held for sale, net of selling costs |
|
|
250 |
|
|
|
250 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
7,010 |
|
|
|
5,975 |
|
|
|
|
|
|
|
|
|
|
Oil and natural gas
properties under full cost method: |
|
|
|
|
|
|
|
|
Unevaluated properties |
|
|
1,584 |
|
|
|
1,588 |
|
Evaluated properties |
|
|
183,495 |
|
|
|
95,088 |
|
Less accumulated depreciation, depletion, amortization and
impairment |
|
|
(89,841 |
) |
|
|
(88,195 |
) |
|
|
|
|
|
|
|
|
|
Net oil and natural gas properties |
|
|
95,238 |
|
|
|
8,481 |
|
|
|
|
|
|
|
|
|
|
Pending acquisition |
|
|
- |
|
|
|
2,767 |
|
Cash calls |
|
|
1,456 |
|
|
|
- |
|
Property and equipment,
net |
|
|
488 |
|
|
|
188 |
|
Right-of-use asset |
|
|
95 |
|
|
|
120 |
|
Deferred tax asset |
|
|
228 |
|
|
|
- |
|
Other assets |
|
|
503 |
|
|
|
132 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
105,018 |
|
|
$ |
17,663 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
4,913 |
|
|
$ |
1,447 |
|
Accrued compensation and benefits |
|
|
173 |
|
|
|
1,162 |
|
Commodity derivative liability-current |
|
|
6,478 |
|
|
|
- |
|
Asset retirement obligations-current |
|
|
1,352 |
|
|
|
- |
|
Premium finance note |
|
|
535 |
|
|
|
- |
|
Warrant liability |
|
|
- |
|
|
|
19 |
|
Current lease obligation |
|
|
104 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
13,555 |
|
|
|
2,742 |
|
|
|
|
|
|
|
|
|
|
Credit facility |
|
|
3,500 |
|
|
|
- |
|
Commodity derivative
liability-noncurrent |
|
|
1,867 |
|
|
|
- |
|
Asset retirement obligations-
noncurrent |
|
|
9,938 |
|
|
|
1,461 |
|
Other long-term
liabilities |
|
|
7 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
28,867 |
|
|
|
4,228 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; unlimited shares authorized;
24,923,812 and 4,676,301 shares issued and outstanding at March 31,
2022 and December 31, 2021, respectively |
|
|
249 |
|
|
|
47 |
|
Additional paid-in capital |
|
|
215,174 |
|
|
|
149,276 |
|
Accumulated deficit |
|
|
(139,272 |
) |
|
|
(135,888 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
76,151 |
|
|
|
13,435 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
105,018 |
|
|
$ |
17,663 |
|
U.S. ENERGY CORP. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSFOR THE THREE MONTHS ENDED
MARCH 31, 2022 AND 2021(In thousands, except share
and per share amounts)
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
Oil |
|
$ |
7,833 |
|
|
$ |
1,132 |
|
Natural gas and liquids |
|
|
1,039 |
|
|
|
79 |
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
|
8,872 |
|
|
|
1,211 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Lease operating expense |
|
|
2,735 |
|
|
|
568 |
|
Production taxes |
|
|
572 |
|
|
|
79 |
|
Depreciation, depletion, accretion and amortization |
|
|
1,886 |
|
|
|
119 |
|
General and administrative expenses |
|
|
2,946 |
|
|
|
734 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
8,139 |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
733 |
|
|
|
(289 |
) |
|
|
|
|
|
|
|
|
|
Other non-operating
income (expense): |
|
|
|
|
|
|
|
|
Commodity derivative (loss) gain |
|
|
(6,837 |
) |
|
|
107 |
|
Marketable equity securities gain |
|
|
81 |
|
|
|
50 |
|
Warrant revaluation loss |
|
|
- |
|
|
|
(20 |
) |
Rental property gain, net |
|
|
- |
|
|
|
17 |
|
Other income |
|
|
- |
|
|
|
25 |
|
Interest expense, net |
|
|
(50 |
) |
|
|
(52 |
) |
Total other (expense) income |
|
|
(6,806 |
) |
|
|
127 |
|
|
|
|
|
|
|
|
|
|
Net loss before income
taxes |
|
|
(6,073 |
) |
|
|
(162 |
) |
Income tax benefit |
|
|
2,689 |
|
|
|
- |
|
Net loss |
|
$ |
(3,384 |
) |
|
$ |
(162 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding |
|
|
23,717,240 |
|
|
|
3,923,730 |
|
Basic and diluted net loss per
share |
|
$ |
(0.14 |
) |
|
$ |
(0.04 |
) |
U.S. ENERGY CORP. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED
MARCH 31, 2022 AND 2021(in thousands)
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,384 |
) |
|
$ |
(162 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion, accretion, and amortization |
|
|
1,886 |
|
|
|
119 |
|
Deferred income taxes |
|
|
(2,689 |
) |
|
|
- |
|
Unrealized loss (gain) on commodity derivatives |
|
|
5,193 |
|
|
|
(109 |
) |
Loss (gain) on marketable equity securities |
|
|
(81 |
) |
|
|
(50 |
) |
Amortization of debt issuance costs |
|
|
10 |
|
|
|
- |
|
Loss on warrant revaluation |
|
|
- |
|
|
|
20 |
|
Loss on related party debt conversion and settlement of legal
costs |
|
|
- |
|
|
|
76 |
|
Stock-based compensation |
|
|
1,500 |
|
|
|
79 |
|
Right of use asset amortization |
|
|
24 |
|
|
|
20 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Decrease (increase) in: |
|
|
|
|
|
|
|
|
Oil and natural gas sales receivable |
|
|
(3,337 |
) |
|
|
(47 |
) |
Other assets |
|
|
(212 |
) |
|
|
(35 |
) |
Increase (decrease) in: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
2,594 |
|
|
|
(227 |
) |
Accrued compensation and benefits |
|
|
(990 |
) |
|
|
(206 |
) |
Payments on operating lease liability |
|
|
(27 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
487 |
|
|
|
(536 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of properties |
|
|
(783 |
) |
|
|
- |
|
Oil and natural gas capital expenditures |
|
|
(855 |
) |
|
|
(376 |
) |
Expenditures for cash calls |
|
|
(1,456 |
) |
|
|
- |
|
Property and equipment expenditures |
|
|
(159 |
) |
|
|
- |
|
Proceeds from sale of oil and gas properties |
|
|
- |
|
|
|
30 |
|
Payment received on note receivable |
|
|
- |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(3,253 |
) |
|
|
(326 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock, net of issuance costs |
|
|
- |
|
|
|
5,283 |
|
Borrowings on credit facility, net |
|
|
3,828 |
|
|
|
- |
|
Repayment of debt |
|
|
(3,847 |
) |
|
|
- |
|
Repayments of insurance premium finance note payable |
|
|
(78 |
) |
|
|
- |
|
Exercise of warrant |
|
|
195 |
|
|
|
- |
|
Shares withheld to settle tax withholding obligations for
restricted stock awards |
|
|
(307 |
) |
|
|
(39 |
) |
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities |
|
|
(209 |
) |
|
|
5,244 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and equivalents |
|
|
(2,975 |
) |
|
|
4,382 |
|
|
|
|
|
|
|
|
|
|
Cash and equivalents, beginning of period |
|
|
4,422 |
|
|
|
2,854 |
|
|
|
|
|
|
|
|
|
|
Cash and equivalents, end of period |
|
$ |
1,447 |
|
|
$ |
7,236 |
|
1Adjusted EBITDA
Reconciliation
In addition to our results calculated under
generally accepted accounting principles in the United States
(“GAAP”), in this earnings release we also present Adjusted EBITDA.
Adjusted EBITDA is a “non-GAAP financial measure” presented as
supplemental measures of the Company’s performance. It is not
presented in accordance with accounting principles generally
accepted in the United States, or GAAP. The Company defines
Adjusted EBITDA as net income (loss), plus net interest expense,
unrealized loss (gain) on change in fair value of derivatives,
income tax (benefit) expense, depreciation, depletion, accretion
and amortization, one-time costs associated with completed
transactions and the associated assumed derivative contracts,
share-based compensation, and changes in the value held on
marketable securities. Company management believes this
presentation is relevant and useful because it helps investors
understand U.S. Energy's operating performance and makes it easier
to compare its results with those of other companies that have
different financing, capital and tax structures. EBITDA is
presented because we believe it provides additional useful
information to investors due to the various noncash items during
the period. Adjusted EBITDA has limitations as an analytical tool,
and you should not consider it in isolation, or as a substitute for
analysis of our operating results as reported under GAAP. Some of
these limitations are: Adjusted EBITDA does not reflect cash
expenditures, or future requirements for capital expenditures, or
contractual commitments; Adjusted EBITDA does not reflect changes
in, or cash requirements for, working capital needs; Adjusted
EBITDA does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal
payments, on debt or cash income tax payments; although
depreciation and amortization are noncash charges, the assets being
depreciated and amortized will often have to be replaced in the
future, and Adjusted EBITDA does not reflect any cash requirements
for such replacements; and other companies in this industry may
calculate Adjusted EBITDA differently than the Company does,
limiting its usefulness as a comparative measure. The Company’s
presentation of these measure should not be construed as an
inference that future results will be unaffected by unusual or
nonrecurring items. We compensate for these limitations by
providing a reconciliation of this non-GAAP measure to the most
comparable GAAP measure, below. We encourage investors and others
to review our business, results of operations, and financial
information in their entirety, not to rely on any single financial
measure, and to view this non-GAAP measure in conjunction with the
most directly comparable GAAP financial measure.
|
|
Three months ended March 31, 2022 |
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
Net Income (loss) |
|
$ |
(3,384 |
) |
|
|
Depreciation, depletion, accretion and amortization |
|
|
1,886 |
|
|
|
Unrealized loss (gain) on commodity derivatives |
|
|
5,193 |
|
|
|
Interest expense, net |
|
|
50 |
|
|
|
Deferred income taxes |
|
|
(2,689 |
) |
|
|
Non-cash stock based compensation |
|
|
1,500 |
|
|
|
Transaction related expenses |
|
|
406 |
|
|
|
Transaction related acquired realized derivative loss |
|
|
1,220 |
|
|
|
Loss (gain) on marketable securities |
|
|
(81 |
) |
|
|
Adjusted EBITDA |
|
|
4,101 |
|
|
|
Corporate Contact:
U.S. Energy Corp.
Ryan Smith
Chief Executive Officer
(303) 993-3200
www.usnrg.com
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