U.S. Energy Corp. Announces Bolt-on Acquisition of Assets
U.S. Energy Corp. (NASDAQCM: USEG) announced the acquisition of operated oil and gas properties in Liberty County, TX, for $1.0 million in cash. The acquired properties, effective from April 1, 2022, are estimated to have Proved Developed Producing (PDP) reserves of approximately 88,510 barrels of oil and a PV-10 value of $2.3 million. This acquisition aligns with U.S. Energy's strategy to consolidate cash-flowing assets and enhance operational efficiencies in existing areas, further bolstered by the Panther City Pipeline, which offers prospects for gas sales.
- Acquisition price of $1.0 million represents a significant discount to the estimated PDP PV-10 value of $2.3 million.
- Addition of approximately 88,510 barrels of oil in PDP reserves enhances U.S. Energy's asset portfolio.
- The Panther City Pipeline acquisition offers potential for improved gas sales and operational economics.
- Integration challenges may arise from the recent acquisition of the new properties.
- Market fluctuations in oil and gas prices could impact the profitability of the newly acquired assets.
HOUSTON, May 03, 2022 (GLOBE NEWSWIRE) -- 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
The consideration payable for the assets is
| Estimates for Properties as 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 ( | $ | 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.
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