U.S. Energy Corp. Announces First Quarter Financial and Operating Results
May 14 2020 - 4:15PM
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, 2020.
First Quarter Highlights
- Successfully closed oil weighted, cash flow accretive
acquisition of New Horizon Resources in North Dakota;
- Production of 27,204 barrels of oil equivalent (“BOE”), or
daily production of 297 barrels of oil equivalent per day (“BOEPD”)
(75% oil);
- Oil and gas revenues of $0.9 million;
- Lease operating expenses of $0.4 million;
- Cash position at March 31, 2020 of $1.1 million;
- Current cash position of $1.3 million;
- No outstanding debt.
“Despite extreme commodity price volatility and
the unprecedented contraction of global hydrocarbon demand, U.S.
Energy is uniquely well positioned to weather the turmoil in the
oil markets,” said Ryan Smith, U.S. Energy’s Chief Executive
Officer. “Our low-cost corporate structure and strong balance sheet
have enabled us to begin successfully implementing our stated
strategy of acquiring PDP heavy assets that are immediately cash
flow accretive. Our closing of the previously announced New
Horizon Resources acquisition, and the structure in which it
transacted, is an example of our strategy being achievable and
successful in the current market. Going forward, our
priorities will continue to be focused on protecting our balance
sheet and current liquidity position while continuing to take
advantage of market dislocations and the associated acquisition
opportunities.”
First Quarter 2020 Production
Update
During the quarter ended March 31, 2020, U.S.
Energy produced volumes of 27,204 BOE (75% oil), an average of
approximately 297 BOE per day.
|
|
1st Quarter 2020 |
Sales Volume
(Total) |
|
|
Oil (Bbls) |
|
20,305 |
Gas (Mcf) |
|
40,313 |
Sales volume (Boe) |
|
27,204 |
|
|
|
Average daily production
(Boe) |
|
297 |
|
|
|
Average Sales
Prices |
|
|
Oil (Bbl) |
$ |
42.11 |
Gas (Mcf) |
$ |
1.69 |
Average price (Boe) |
$ |
34.16 |
Current Liquidity Position
At March 31, 2020, the Company had approximately
$1.1 million in cash. As of May 14, 2020, we had approximately $1.3
million in cash, no outstanding debt and 1,404,817 shares
outstanding. The Company had capital expenditures of approximately
$128 thousand during the quarter ended March 31, 2020, which
primarily consisted of the cash portion paid as part of the New
Horizon Resources acquisition.
|
|
As of May 14, 2020 |
Cash balance ($mm) |
|
$ |
1.3 |
Debt outstanding ($mm) |
|
$ |
0.0 |
Shares outstanding |
|
|
1,404,817 |
First Quarter Ended March 31, 2020
Financial Results
Revenues from sales of oil and natural gas
during the first quarter of 2020 were $0.9 million compared to $1.6
million during the comparable period of 2019. The change in revenue
was primarily attributable to a decrease in commodity prices
combined with a decrease in production volumes. We realized an
average oil sales price of $42.11 per Bbl and an average gas sales
price of $1.69 per Mcf for an overall average sales price of $34.16
per BOE. Our average realized oil price per Bbl for January 2020,
February 2020 and March 2020 was $54.10, $44.15 and $25.22,
respectively. Revenue from oil production represented 93% of
Company revenue during the quarter.
Lease operating expenses during the first
quarter of 2020 were $0.4 million, or $15.00 per BOE, compared to
$0.5 million, or $13.64 per BOE, during the comparable period of
2019. The decrease in overall lease operating expenses was
the result of reduced overall field activity. The increase in lease
operating expenses on a per BOE basis was driven by the expected
natural decline of wells drilled in late 2018 and early 2019,
primarily from the participation in development on our South Texas
acreage.
General and administrative (“G&A”) expenses
totaled $572 thousand during the first quarter of 2020 compared to
$848 thousand during the comparable period of 2019. The reduction
was primarily attributable to a decrease in professional fees
combined with savings realized as a result of the Company’s
successful implementation of a reduction in corporate overhead.
We believe expenditures related to the litigation involving
the Company during 2019 are substantially behind us and expect a
continued reduction in professional fees throughout 2020.
Net loss was $306 thousand and Adjusted EBITDAX
was $(40) thousand for the first quarter of 2020. Adjusted EBITDAX
is a non-GAAP financial measure. Please see the below table
that provides an unaudited reconciliation of net loss to Adjusted
EBITDAX for the three months ended March 31, 2020 and 2019.
|
|
1q2020 |
|
|
1q2019 |
|
|
|
(in thousands) |
|
Income (loss) from continuing operations (GAAP) |
|
$ |
(306 |
) |
|
$ |
15 |
|
Depreciation, depletion,
accretion and amortization |
|
|
142 |
|
|
|
202 |
|
Unrealized loss (gain) loss on
marketable equity securities |
|
|
76 |
|
|
|
(12 |
) |
Loss (gain) on warrant
revaluation |
|
|
6 |
|
|
|
(8 |
) |
Stock-based compensation
expense |
|
|
42 |
|
|
|
13 |
|
Interest, net |
|
|
- |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
(40 |
) |
|
$ |
231 |
|
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 target low decline assets with existing infrastructure
that allows us to maximize our return on capital in a cost
effective and sustainable manner. 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 concerning 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 Smith
Chief Executive Officer
(303) 993-3200
www.usnrg.com
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