U.S. Energy Corp. Announces Sale of Certain Non-Operated Williston Basin Assets
October 10 2017 - 6:00AM
U.S. Energy Corp. (NASDAQ:USEG) (“U.S. Energy” or
the “Company”) today announced it has entered into a purchase and
sale agreement (“Purchase Agreement”) to sell certain non-operated
assets in the Williston Basin for the elimination of $4.2 million
in outstanding liabilities and $2.0 million in cash. The
agreement was unanimously approved by the board of directors of the
Company and closed on October 5, 2017, with an effective date of
August 1, 2017.
Highlights
- U.S. Energy eliminated $4.2 million of outstanding current
liabilities associated with the divested assets as of June 30,
2017.
- U.S. Energy received $2.0 million in cash.
- Transaction substantially reduces U.S. Energy’s outstanding
liabilities and improves working capital.
- Divested properties had a Proved Reserve PV-10 of $5.2 million
at June 30, 2017.
Transaction Overview
The below table shows the effect on the
Company’s balance sheet for the quarter ended June 30, 2017:
|
|
6/30/2017 |
|
Transaction Adjustment |
|
Pro-Forma6/30/2017 |
Current Assets
(000’s) |
|
|
|
|
|
|
Cash: |
|
$1,987 |
|
$2,000 |
|
$3,987 |
Other: |
|
2,574 |
|
- |
|
|
2,574 |
Total: |
|
$4,561 |
|
$2,000 |
|
$6,561 |
|
|
|
|
|
|
|
Current
Liabilties (000’s) |
|
|
|
|
|
|
Payable to major
operator: |
|
$2,667 |
|
$(2,667) |
|
$- |
Contingent ownership
interests: |
|
1,518 |
|
$(1,518) |
|
- |
Other: |
|
811 |
|
$- |
|
811 |
Total: |
|
$4,996 |
|
$(4,185) |
|
$811 |
|
|
|
|
|
|
|
Working
Capital |
|
$(435) |
|
- |
|
$5,750 |
The below table shows the effect on the
Company’s mid-year 2017 reserve report:
|
|
Mid-Year 2017 Reserve
Report |
|
Transaction Adjustment |
|
Pro-Forma Mid-Year 2017
Reserve Report |
|
|
|
|
|
|
|
Proved Developed
Producing Reserves (Mboe) |
|
1,458 |
|
(607) |
|
851 |
PV-10 (000’s)* |
|
$13,930 |
|
(5,178) |
|
$8,751 |
*SEC pricing of $48.95/bbl of oil and $3.01/mcf
of gas
David Veltri, Chairman and CEO of U.S. Energy,
stated, “The successful closing of this transaction represents a
major milestone for U.S. Energy. We are pleased to have
resolved the previously disclosed disputes regarding the divested
properties and to have removed the associated overhang that has
been detrimental to the Company since 2015. It should also be
noted that due to the outstanding liabilities associated with the
divested assets, U.S. Energy had not received any revenue from the
properties since 2015 and was not forecasted to receive further
revenue until 2020. In addition, approximately 75% of the acreage
for future potential downspacing had been previously divested. The
cash received from the transaction will further our ability to
participate in organic production growth while the elimination of
84% of our current liabilities will provide the Company the
flexibility to evaluate larger projects in the future.”
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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