U.S. Energy Corp. Reports Financial and Operating Results for Full Year and Fourth Quarter 2023
- Total daily production in 2023 averaged 1,711 Boe/d with oil production at 1,073 Bbl/d.
- Revenue totaled $32.3 million with oil sales of $28.4 million and natural gas and liquids sales of $4.0 million.
- Lease operating expense decreased by 8% in 2023 compared to 2022.
- Adjusted EBITDA for 2023 was $5.0 million.
- The company ended the year with an outstanding debt balance of $5.0 million and $3.4 million of cash.
- A $5.0 million share repurchase program was launched, repurchasing more than 0.6 million shares of common stock.
- The company completed the divestment of non-core assets in the fourth quarter, generating $7.3 million of sales proceeds.
- The company hedged an average of 514 Bbl/d oil production for full year 2024 at a weighted average price of $81.16 per Bbl.
- Management emphasized capital allocation discipline and organic growth initiatives for value creation.
- As of December 31, 2023, the company had debt outstanding of $5.0 million and a borrowing base of $20.0 million.
- For the full year 2023, the company produced 624,420 Boe, with average sales prices showing a decline compared to 2022.
- The company generated Adjusted EBITDA of $1.4 million for the fourth quarter of 2023.
- Year-end 2023 SEC proved reserves were 4.9 MBoe, with a PV-10 value of $70.1 million.
- Hedged volumes and weighted average hedge prices for full year 2024 were provided.
- A conference call to review financial results was scheduled for March 27, 2024.
- Total revenue decreased by 27% in 2023 compared to 2022.
- Net loss of $32.4 million was reported for 2023, largely due to an impairment of oil and natural gas properties.
- Equity compensation expense increased by 24% for the year.
- Oil and natural gas prices showed declines compared to the previous year.
- Total revenue decreased by 16% in the fourth quarter of 2023 compared to the third quarter.
- Cash general and administrative expense remained flat for the quarter.
- Natural gas and liquids sales declined by 2% in the fourth quarter.
- The Company's SEC proved reserves showed reductions in pricing compared to year-end 2022.
- The year-end 2023 SEC proved reserves were comprised of 65% oil and 35% natural gas.
- The present value of the Company's reported SEC proved reserves decreased at year-end 2023 compared to year-end 2022.
Insights
The reported financial results for U.S. Energy Corporation indicate several key trends that are vital for understanding the company's fiscal health and future prospects. The decrease in total revenue by 27% year-over-year, primarily driven by lower commodity pricing, reflects the volatility in the energy market and the direct impact on oil and gas companies' top-line growth. The reported decrease in lease operating expense, which improved by 9% from the previous year, suggests effective cost management strategies are in place. However, investors should be cautious about the net loss of $32.4 million, significantly influenced by a $26.7 million impairment charge, which illustrates the sensitivity of asset valuations to fluctuating commodity prices.
The company's hedging strategy, with a weighted average price of $81.16 per Bbl for oil production in 2024, serves as a risk mitigation tool against price uncertainty. This forward-looking approach to secure future cash flows at a set price can be reassuring for investors seeking stability in an inherently unpredictable sector. Additionally, the balance sheet shows a conservative leverage with a net debt to Adjusted EBITDA ratio of 0.3x, which is a positive sign of financial prudence and provides flexibility for future growth initiatives or market downturns.
From a market perspective, U.S. Energy Corporation's announcement of a share repurchase program signifies management's confidence in the intrinsic value of the company. The repurchase of more than 2% of outstanding shares at an average price significantly below previous market prices can be perceived as an attempt to stabilize stock price and provide direct value to shareholders. The extension of the share repurchase program timeline to June 2025 reflects a long-term commitment to this strategy. However, the effectiveness of such programs in delivering shareholder value is often debated and should be monitored in the context of overall market performance and sector trends.
The divestment of non-core assets and the subsequent debt repayment exhibit a strategic pivot towards streamlining operations and focusing on core competencies. This move could potentially lead to improved operational efficiency and higher margins. Nevertheless, the production and pricing updates, with a slight increase in production but a significant decrease in average sales prices, highlight the challenges faced in the energy sector, particularly with the current instability of oil and natural gas prices.
Analyzing the operational side, the marginal increase in production paired with a significant decrease in average sales prices for oil and gas indicates that U.S. Energy is somewhat insulated from the full brunt of price volatility due to its production efficiency. The focus on maintaining a lower declining asset base and the company's ability to reduce lease operating expenses are indicative of a robust operational framework. However, the 38% decrease in reserve volumes year-over-year raises concerns about the sustainability of production levels and the company's reserve replacement strategy.
The company's emphasis on a predictable production profile and commitment to capital allocation discipline are essential in a sector where long-term planning is often hindered by short-term price fluctuations. The reserve summary, with 99% classified as proved developed producing, suggests a low-risk reserve profile, which is favorable for consistent cash flow generation. The present value of the company's SEC proved reserves, discounted at 10%, standing at $70.1 million, provides an indication of the underlying asset value, although this should be weighed against the overall net loss and impairment charges reported.
HOUSTON, March 26, 2024 (GLOBE NEWSWIRE) -- U.S. Energy Corporation (NASDAQ: USEG, “U.S. Energy” or the “Company”), a growth-focused energy company engaged in operating a portfolio of high-quality producing oil and natural gas assets, today reported financial and operating results for the three and twelve months ended December 31, 2023.
FULL YEAR 2023 HIGHLIGHTS
- Total daily production in 2023 averaged 1,711 Boe/d; oil production averaged 1,073 Bbl/d.
- Revenue totaled
$32.3 million with oil sales of$28.4 million and natural gas and liquids sales of$4.0 million . - Lease operating expense of
$15.3 million , or$24.43 per Boe, a8% and9% decrease, respectively, from 2022. - Oil and gas related capital expenditures of
$3.4 million compared to$6.2 million in 2022. - Generated Adjusted EBITDA, a non-GAAP measure, of
$5.0 million for 2023. - Ended the year with an outstanding debt balance of
$5.0 million ,$3.4 million of cash, total liquidity of$18.4 million , and net debt to Adjusted EBITDA of 0.3x. - Launched a
$5.0 million share repurchase program, repurchasing more than 0.6 million shares of common stock, representing greater than2% of outstanding shares, for approximately$0.7 million , from program initiation through February 2024.
FOURTH QUARTER 2023 HIGHLIGHTS
- Completed the divestment of legacy non-core assets in the fourth quarter, generating
$7.3 million of sales proceeds used for debt repayment and an accelerated shareholder returns program. - Hedged an average of 514 Bbl/d oil production for full year 2024 at a weighted average price of
$81.16 per Bbl for oil. - Total daily production averaged 1,509 Boe/d; oil production averaged 928 Bbl/d.
- Revenue totaled
$7.3 million with oil sales of$6.4 million and natural gas and liquids sales of$0.9 million . - Lease operating expense of
$3.1 million , or$22.38 per Boe, a22% and15% decrease, respectively, from the third quarter 2023. - Oil and gas related capital expenditures of
$0.5 million , equivalent to the spend in the third quarter 2023. - Generated Adjusted EBITDA of
$1.4 million for the fourth quarter 2023.
MANAGEMENT COMMENTS
"I am pleased with our team’s performance during 2023, efforts which continue advancing the Company’s daily goal of unlocking shareholder value,” said Ryan Smith, U.S. Energy’s Chief Executive Officer. “U.S. Energy’s track record of successfully integrating the Company’s previous acquisitions has resulted in a more efficient and lower declining asset base today, as shown in the operating results and cost structure of the Company. As a result, U.S. Energy’s strong, de-levered balance sheet and predictable production profile are well positioned to support the Company’s growth initiatives while enabling management to allocate capital to the highest rate of return projects. As we move forward through 2024, we believe maintaining capital allocation discipline, exploiting organic growth initiatives, and using a portion of free cash flow to support shareholder returns is the right combination in today’s environment to drive value creation for the Company’s shareholders.”
SHAREHOLDER RETURNS PROGRAM UPDATE
Since the beginning of the Company’s share repurchase program in May 2023 through February 2024, U.S. Energy has repurchased greater than 0.6 million shares of common stock at an average price of
On March 19, 2023, the Company's Board of Directors authorized and approved an extension of the ongoing share repurchase program for up to
BALANCE SHEET UPDATE
As of December 31, 2023, the Company had debt outstanding of
The Company's cash and cash equivalents balance was
FULL YEAR 2023 PRODUCTION AND PRICING UPDATE
For the full year 2023, the Company produced 624,420 Boe, or an average of 1,711 Boe/d, as compared to 620,579 Boe, or an average of 1,700 Boe/d during the prior year, 2022.
| Change | ||||||||||||
| 2023 | 2022 | Percent | ||||||||||
| Production quantities: | ||||||||||||
| Oil (Bbls) | 391,645 | 396,456 | -1 | % | ||||||||
| Gas (Mcfe) | 1,396,650 | 1,344,735 | 4 | % | ||||||||
| BOE | 624,420 | 620,579 | 1 | % | ||||||||
| BOE per day | 1,711 | 1,700 | 1 | % | ||||||||
| Average sales prices: | ||||||||||||
| Oil (Bbls) | $ | 72.39 | $ | 91.54 | -21 | % | ||||||
| Gas (Mcfe) | $ | 2.84 | $ | 6.14 | -54 | % | ||||||
| BOE | $ | 51.75 | $ | 71.79 | -28 | % | ||||||
FULL YEAR 2023 FINANCIAL AND OPERATING SUMMARY
For the full year 2023, revenue totaled
Lease operating expense, inclusive of workover expense, totaled
Cash general and administrative expense totaled
U.S. Energy generated Adjusted EBITDA of
FOURTH QUARTER PRODUCTION AND PRICING UPDATE
For the fourth quarter 2023, the Company produced 138,788 Boe, or an average of 1,509 Boe/d, as compared to 152,013 Boe, or an average of 1,652 Boe/d during the third quarter 2023.
| Change | ||||||||||||
| 4Q 2023 | 3Q 2023 | Percent | ||||||||||
| Production quantities: | ||||||||||||
| Oil (Bbls) | 85,363 | 100,071 | -15 | % | ||||||||
| Gas (Mcfe) | 320,546 | 311,654 | 3 | % | ||||||||
| BOE | 138,788 | 152,013 | -9 | % | ||||||||
| BOE per day | 1,509 | 1,652 | -9 | % | ||||||||
| Average sales prices: | ||||||||||||
| Oil (Bbls) | $ | 75.17 | $ | 78.05 | -4 | % | ||||||
| Gas (Mcfe) | $ | 2.83 | $ | 2.98 | -5 | % | ||||||
| BOE | $ | 52.77 | $ | 57.50 | -8 | % | ||||||
FOURTH QUARTER FINANCIAL AND OPERATING SUMMARY
Revenue totaled
Fourth quarter lease operating expense totaled
Cash general and administrative expense totaled
For the fourth quarter of 2023, U.S. Energy generated Adjusted EBITDA of
RESERVES SUMMARY
The Company's year-end 2023 SEC proved reserves, as prepared by an independent third-party reserve engineer, were 4.9 MBoe.
The SEC twelve-month first day of month average used for year end 2023 was
The present value of the Company's reported SEC proved reserves, discounted at
HEDGE SUMMARY
The following table reflects the hedged volumes under U.S. Energy's commodity derivative contracts and the weighted average hedge price. at which production is hedged for the full year 2024.
| Fixed Price Swaps | ||||||||
| Weighted | ||||||||
| Quantity | Average | |||||||
| Commodity/ Index/ Maturity Period | (Bbls) | Price | ||||||
| NYMEX WTI | ||||||||
| Crude Oil 2024 Contracts: | ||||||||
| First quarter 2024 | 53,300 | $ | 84.07 | |||||
| Second quarter 2024 | 48,600 | $ | 81.76 | |||||
| Third quarter 2024 | 45,000 | $ | 79.80 | |||||
| Fourth quarter 2024 | 40,720 | $ | 78.15 | |||||
| Total 2024 | 187,620 | $ | 81.16 | |||||
CONFERENCE CALL DETAILS
A conference call will be held Wednesday, March 27, 2024, at 9:00 a.m. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session. Investors and participants can listen to the call by dialing 1-877-407-3982 (U.S.) or 1-201-493-6780 (International).
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 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.
INVESTOR RELATIONS CONTACT
Mason McGuire
IR@usnrg.com
(303) 993-3200
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; the review and evaluation of potential strategic transactions and their impact on stockholder value; the process by which the Company engages in evaluation of strategic transactions; the outcome of potential future strategic transactions and the terms thereof; 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, 2023. 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.
FINANCIAL STATEMENTS
| U.S. ENERGY CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and equivalents | $ | 3,351 | $ | 4,411 | ||||
| Oil and natural gas sales receivables | 2,336 | 3,193 | ||||||
| Marketable equity securities | 164 | 107 | ||||||
| Commodity derivative asset - current | 1,844 | - | ||||||
| Other current assets | 527 | 558 | ||||||
| Real estate assets held for sale, net of selling costs | 150 | 175 | ||||||
| Total current assets | 8,372 | 8,444 | ||||||
| Oil and natural gas properties under full cost method: | ||||||||
| Unevaluated properties | - | 1,584 | ||||||
| Evaluated properties | 176,679 | 203,144 | ||||||
| Less accumulated depreciation, depletion, amortization, and impairment | (106,504 | ) | (96,725 | ) | ||||
| Net oil and natural gas properties | 70,175 | 108,003 | ||||||
| Other assets: | ||||||||
| Property and equipment, net | 899 | 651 | ||||||
| Right of use asset | 693 | 868 | ||||||
| Other assets | 305 | 354 | ||||||
| Total other assets | 1,897 | 1,873 | ||||||
| Total assets | $ | 80,444 | $ | 118,320 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 4,064 | $ | 4,329 | ||||
| Accrued compensation and benefits | 702 | 1,111 | ||||||
| Revenue and royalties payable | 4,857 | 3,503 | ||||||
| Commodity derivative liability - current | - | 1,694 | ||||||
| Asset retirement obligations - current | 1,273 | 668 | ||||||
| Current lease obligation | 182 | 189 | ||||||
| Total current liabilities | 11,078 | 11,494 | ||||||
| Noncurrent liabilities: | ||||||||
| Credit facility | 5,000 | 12,000 | ||||||
| Asset retirement obligations - noncurrent | 17,217 | 14,774 | ||||||
| Long-term lease obligation, net of current portion | 611 | 794 | ||||||
| Deferred tax liability | 16 | 898 | ||||||
| Other noncurrent liabilities | - | 6 | ||||||
| Total noncurrent liabilities | 22,844 | 28,472 | ||||||
| Total liabilities | 33,922 | 39,966 | ||||||
| Commitments and contingencies (Note 9) | ||||||||
| Shareholders’ equity: | ||||||||
| Common stock, | 253 | 250 | ||||||
| Additional paid-in capital | 218,403 | 216,690 | ||||||
| Accumulated deficit | (172,134 | ) | (138,586 | ) | ||||
| Total shareholders’ equity | 46,522 | 78,354 | ||||||
| Total liabilities and shareholders’ equity | $ | 80,444 | $ | 118,320 | ||||
| U.S. ENERGY CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022 (In thousands, except share and per share amounts) | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Oil | $ | 28,352 | $ | 36,293 | ||||
| Natural gas and liquids | 3,964 | 8,259 | ||||||
| Total revenue | 32,316 | 44,552 | ||||||
| Operating expenses: | ||||||||
| Lease operating expenses | 15,254 | 16,667 | ||||||
| Gathering, transportation, and treating | 557 | 573 | ||||||
| Production taxes | 2,107 | 3,010 | ||||||
| Depreciation, depletion, accretion, and amortization | 11,235 | 9,607 | ||||||
| Impairment of oil and natural gas properties | 26,680 | - | ||||||
| General and administrative expenses | 11,523 | 11,157 | ||||||
| Total operating expenses | 67,356 | 41,014 | ||||||
| Operating income (loss) | (35,040 | ) | 3,538 | |||||
| Other income (expense): | ||||||||
| Commodity derivative gain (loss), net | 2,882 | (5,682 | ) | |||||
| Interest (expense), net | (1,114 | ) | (544 | ) | ||||
| Other income (expense), net | 25 | (168 | ) | |||||
| Total other income (expense) | 1,793 | (6,394 | ) | |||||
| Net income (loss) before income taxes | $ | (33,247 | ) | $ | (2,856 | ) | ||
| Income tax (expense) benefit | 891 | 1,893 | ||||||
| Net income (loss) | $ | (32,356 | ) | $ | (963 | ) | ||
| Basic and diluted weighted average shares outstanding | 25,322,382 | 24,668,219 | ||||||
| Basic and diluted loss per share | $ | (1.28 | ) | $ | (0.04 | ) | ||
| U.S. ENERGY CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022 (in thousands) | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (32,356 | ) | $ | (963 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation, depletion, accretion, and amortization | 11,235 | 9,607 | ||||||
| Impairment of oil and natural gas properties | 26,680 | - | ||||||
| Deferred income taxes | (882 | ) | (1,921 | ) | ||||
| Total commodity derivatives (gains) losses, net | (2,882 | ) | 5,682 | |||||
| Commodity derivative settlements paid | (656 | ) | (7,140 | ) | ||||
| (Gains) losses on marketable equity securities | (57 | ) | 83 | |||||
| Impairment and loss on real estate held for sale | 25 | 75 | ||||||
| Amortization of debt issuance costs | 49 | 45 | ||||||
| Stock-based compensation | 2,293 | 3,017 | ||||||
| Right of use asset amortization | 175 | 205 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Oil and natural gas sales receivable | 851 | (2,261 | ) | |||||
| Other assets | 687 | 150 | ||||||
| Accounts payable accrued liabilities | (60 | ) | 1,414 | |||||
| Accrued compensation and benefits | (410 | ) | (51 | ) | ||||
| Revenue and royalties payable | 1,184 | 3,467 | ||||||
| Payments on operating lease liability | (189 | ) | (104 | ) | ||||
| Payments of asset retirement obligations | (215 | ) | (407 | ) | ||||
| Net cash provided by (used in) operating activities | 5,472 | 10,898 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of proved properties | - | (12,641 | ) | |||||
| Oil and natural gas capital expenditures | (3,379 | ) | (6,208 | ) | ||||
| Property and equipment expenditures | (488 | ) | (435 | ) | ||||
| Proceeds from sale of oil and natural gas properties, net | 6,693 | 2,335 | ||||||
| Net cash provided by (used in) investing activities: | 2,826 | (16,949 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Borrowings on credit facility | 500 | 15,200 | ||||||
| Payment of debt | (7,500 | ) | (6,547 | ) | ||||
| Payment of fees for credit facility | - | (207 | ) | |||||
| Payments on insurance premium finance note | (647 | ) | (559 | ) | ||||
| Exercise of warrant | - | 195 | ||||||
| Shares withheld to settle tax withholding obligations for restricted stock awards | (151 | ) | (307 | ) | ||||
| Dividends paid | (1,192 | ) | (1,735 | ) | ||||
| Repurchases of common stock | (368 | ) | - | |||||
| Net cash provided by (used in) financing activities | (9,358 | ) | 6,040 | |||||
| Net (decrease) increase in cash and equivalents | (1,060 | ) | (11 | ) | ||||
| Cash and equivalents, beginning of year | 4,411 | 4,422 | ||||||
| Cash and equivalents, end of year | $ | 3,351 | $ | 4,411 | ||||
ADJUSTED 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, net unrealized loss (gain) on change in fair value of derivatives, income tax (benefit) expense, deferred income taxes, depreciation, depletion, accretion and amortization, one-time costs associated with completed transactions and the associated assumed derivative contracts, non-cash share-based compensation, transaction related expenses, transaction related acquired realized derivative loss (gain), and loss (gain) 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. Adjusted 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 this 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.
| In thousands | Year Ended December 31, | |||||||
| 2023 | 2022 | |||||||
| Adjusted EBITDA Reconciliation | ||||||||
| Net Income (Loss) | $ | (32,356 | ) | $ | (963 | ) | ||
| Depreciation, depletion, accretion and amortization | 11,235 | 9,607 | ||||||
| Unrealized loss (gain) on commodity derivatives | (3,538 | ) | (1,458 | ) | ||||
| Interest Expense, net | 1,114 | 544 | ||||||
| Income tax expense (benefit) | (891 | ) | (1,893 | ) | ||||
| Non-cash stock based compensation | 2,293 | 3,017 | ||||||
| Transaction related expenses | - | 712 | ||||||
| Transaction related acquired realized derivative losses | 496 | 5,347 | ||||||
| Loss (gain) on marketable securities | (57 | ) | 83 | |||||
| Loss (gain) on real estate held for sale | 25 | 75 | ||||||
| Impairment of oil and natural gas properties | 26,680 | - | ||||||
| Total Adjustments | 37,357 | 16,034 | ||||||
| Total Adjusted EBITDA | $ | 5,001 | $ | 15,071 | ||||
FAQ
What was U.S. Energy 's (USEG) total daily production average for 2023?
What was the revenue total for U.S. Energy (USEG) in 2023?
What was U.S. Energy 's (USEG) outstanding debt balance at the end of 2023?
What program did U.S. Energy (USEG) launch in 2023?
What did the management of U.S. Energy (USEG) emphasize for value creation?
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