U.S. Energy Corp. Announces First Quarter Financial and Operating Results

Riverton, Wyoming, UNITED STATES

HOUSTON, May 14, 2020 (GLOBE NEWSWIRE) -- 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.


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