U.S. Energy Corp. Reports Financial and Operating Results for Full Year and Fourth Quarter 2024

HOUSTON, March 13, 2025 (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 assets, today reported financial and operating results for the fourth quarter and year ended December 31, 2024.

FULL YEAR 2024 HIGHLIGHTS

   -- Continued the divestment of legacy non-core assets during 2024, 
      generating $13.5 million in net sales proceeds used for development of 
      the Company's industrial gas project in Montana, debt repayment, and 
      accelerated shareholder returns program. 
 
   -- Total daily production in 2024 averaged 1,136 Boe/d; oil production 
      averaged 702 Bbl/d. 
 
   -- Revenue totaled $20.6 million with oil sales of $18.2 million and natural 
      gas and liquids sales of $2.5 million. 
 
   -- Lease operating expense of $11.2 million, or $26.83 per Boe, a 27% 
      decrease in total expenditure from 2023. 
 
   -- Industrial gas capital expenditures of $3.9 million. 
 
   -- Oil and gas related capital expenditures of $1.4 million compared to $3.4 
      million in 2023. 
 
   -- Generated Adjusted EBITDA, a non-GAAP measure, of $3.6 million for 2024. 
 
   -- Ended the year with $7.7 million of cash, no debt outstanding, and total 
      liquidity of $27.7 million. 
 
   -- Subsequent to year end, successfully completed an underwritten public 
      equity offering, with net proceeds to the Company of approximately $12.1 
      million. 
 
   -- Continued our $5.0 million share repurchase program, repurchasing 0.6 
      million shares during 2024, and when combined with YTD 2025 activity, a 
      total program repurchase of 1.67 million shares or approximately 4.9% of 
      total shares outstanding. 

FOURTH QUARTER 2024 HIGHLIGHTS

   -- Continued the divestment of legacy non-core assets in the fourth quarter, 
      generating $7.7 million of sales proceeds used for the Company's 
      industrial gas project development in Montana and accelerated shareholder 
      returns program. 
 
   -- Total daily production averaged 971 Boe/d; oil production averaged 595 
      Bbl/d. 
 
   -- Revenue totaled $4.2 million with oil sales of $3.6 million and natural 
      gas and liquids sales of $0.6 million. 
 
   -- Lease operating expense of $1.8 million, or $20.58 per Boe, a 40% and 29% 
      decrease, respectively, from the third quarter 2024. 
 
   -- Industrial gas property capital expenditures of $2.4 million, an increase 
      of 48% when compared to the $1.6 million spent in the third quarter 2024. 
 
   -- Oil and gas related capital expenditures of $0.2 million, a decrease of 
      50% as compared to the $0.5 million spent in the third quarter 2024. 
 
   -- Generated Adjusted EBITDA of $0.4 million for the fourth quarter 2024. 

MANAGEMENT COMMENTS

"2024 was a defining year for U.S. Energy as we began the development of our newly acquired industrial gas focused assets," said Ryan Smith, Chief Executive Officer of U.S. Energy Corp. "Through disciplined execution, we strengthened our financial position, eliminated all outstanding debt, optimized our legacy asset portfolio, and made significant strides in advancing our Montana-based industrial gas project by acquiring over 160,000 acres in 2024 and early-2025 across two separate acquisitions. Our most recent acquisition of 24,000 additional net acres in early-2025 further solidifies our position as an emerging leader in the industrial gas development space. Looking ahead, we are focused on scaling our operations, executing new drilling and workover programs, finalizing our gas processing infrastructure, advancing our carbon sequestration initiatives, and leveraging our growing asset base to drive sustainable growth. With a strong balance sheet, zero debt, and a clear strategic roadmap, we are confident in our ability to generate long-term shareholder value while positioning U.S. Energy as a first mover in the rapidly growing industrial gas complex."

MONTANA PROJECT TIMELINE

The Company has an active development program planned during the first half of 2025 as it continues the development of its industrial gas assets on the Kevin Dome in Montana. We have chosen to begin our initial 2025 development activities in April to avoid the inclement winter weather seen in Montana throughout 1q2025. U.S. Energy's initial 2025 development activities consist of the following:

   -- Completion and workover of two existing industrial gas wells 
      (April 2025). 
 
   -- Drill and complete two new industrial gas wells (June 2025). 
 
   -- Permit one industrial gas well for Class II injection. 
 
   -- Begin the drafting and ultimate submission of the Company's Monitoring, 
      Reporting, and Verification report ("MRV"), formally launching the 
      Company's carbon sequestration business (2q2025). 
 
   -- Final investment decision around design capacity and execution of 
      contract for the Company's industrial gas processing plant (2q2025). 

All forecasted activity is expected to be funded from cash on hand and existing cash flow from operations. U.S. Energy expects to provide further updates on the Company's development progress throughout the second and third fiscal quarters of 2025.

JANUARY 2025 EQUITY CAPITAL RAISE

On January 27th, 2025, the Company closed its underwritten public offering of 4.9 million shares at a public offering price of $2.65 per share. Net proceeds from the offering totaled $12.1 million after underwriting commissions and $10.5 million after repurchasing 0.6 million shares at $2.48 per share from certain affiliates in connection with the public offering.

SHAREHOLDER RETURNS PROGRAM UPDATE

Since the beginning of the Company's share repurchase program in May 2023 through February 2025, U.S. Energy has repurchased greater than 1.0 million shares of common stock at an average price of $1.28 per share. Outside of the repurchase program, the Company repurchased 0.6 million shares repurchased from a related party in connection with the 2025 equity capital raise. Combined, U.S. Energy's total share repurchases of 1.67 million shares at an average price of $1.73 per share represent 4.9% of outstanding shares of common stock as of March 13, 2025.

On January 29, 2025, the Company's Board of Directors authorized and approved an extension of the ongoing share repurchase program for up to $5.0 million, which was set to expire June 30, 2025. The repurchase program is now scheduled to expire June 30, 2026. As of this filing, a total of up to $3.7 million remains available under the repurchase program for future repurchases.

FULL YEAR 2024 PRODUCTION AND PRICING UPDATE

For the full year 2024, the Company produced 415,887 Boe, or an average of 1,136 Boe/d, as compared to 624,420 Boe, or an average of 1,711 Boe/d during the prior year, 2023.

 
                                                Change 
                            2024       2023     Percent 
                          --------  ----------  ------- 
 
Production quantities: 
Oil (Bbls)                 256,166     391,645      -35% 
Gas (Mcfe)                 958,325   1,396,650      -31% 
BOE                        415,887     624,420      -33% 
BOE per day                  1,136       1,711      -34% 
 
Average sales prices: 
Oil (Bbls)                $  70.91  $    72.39       -2% 
Gas (Mcfe)                $   2.56  $     2.84      -10% 
BOE                       $  49.58  $    51.75       -4% 
 
 

FULL YEAR 2024 FINANCIAL AND OPERATING SUMMARY

For the full year 2024, revenue totaled $20.6 million with $18.2 million and $2.5 million coming from oil sales and natural gas and liquids sales, respectively. When compared to 2023, total revenue decreased by 36% while oil sales declined 36% and natural gas and liquids declined 38%, primarily driven by a decline in production as assets were divested in 2024 as well as a decline in realized commodity pricing.

Lease operating expense, inclusive of workover expense, totaled $11.2 million, or $26.83 per Boe, a 27% and 10% decrease, respectively, from 2023. For the full year 2023, lease operating and workover expense totaled $15.3 million or $24.43 per Boe.

Cash general and administrative expense totaled $6.9 million for the year, representing a 25% decrease from 2023 primarily due to a reduction in compensation and benefits year-over-year. Equity compensation expense totaled $1.3 million, representing a 45% decrease from 2023.

U.S. Energy generated Adjusted EBITDA of $3.6 million during 2024. The Company reported a net loss of $25.8 million, or $0.96 per diluted share, largely due to a $11.9 million impairment of oil and natural gas properties and a $5.0 million loss on sale of assets related to our East Texas properties divested during the fourth quarter 2024. The impairment was driven by a 38% year over year decrease in reserve volumes resulting from decreases in commodity prices and other reserve revisions.

FOURTH QUARTER PRODUCTION AND PRICING UPDATE

For the fourth quarter 2024, the Company produced 89,298 Boe, or an average of 971 Boe/d, as compared to 105,699 Boe, or an average of 1,149 Boe/d during the third quarter 2024.

 
                                              Change 
                          4Q 2024   3Q 2024   Percent 
                          --------  --------  ------- 
 
Production quantities: 
Oil (Bbls)                  54,750    61,185      -11% 
Gas (Mcfe)                 207,289   267,089      -22% 
BOE                         89,298   105,699      -16% 
BOE per day                    971     1,149      -16% 
 
Average sales prices: 
Oil (Bbls)                $  65.58  $  71.50       -8% 
Gas (Mcfe)                $   3.06  $   2.18       41% 
BOE                       $  47.32  $  46.89        1% 
 
 

FOURTH QUARTER FINANCIAL AND OPERATING SUMMARY

Revenue totaled $4.2 million with $3.6 million generated by oil sales and $0.6 million through natural gas and liquids sales for the fourth quarter 2024. When compared to the third quarter 2024, total revenue decreased by 15% while oil sales declined 18% and natural gas and liquids declined 9%, both primarily driven by assets divested during the fourth quarter of 2023 and a decline in realized commodity pricing.

Fourth quarter lease operating expense totaled $1.8 million or $20.58 per Boe compared to $3.1 million or $28.95 per Boe in the third quarter of 2024, a 40% and 29% decrease, respectively, from the third quarter of 2024.

Cash general and administrative expense totaled $1.7 million for the quarter, representing a materially flat amount from the third quarter of 2024. Equity compensation expense totaled $0.3 million, also flat from the third quarter of 2024.

For the fourth quarter of 2024, U.S. Energy generated Adjusted EBITDA of $0.4 million.

RESERVES SUMMARY

The Company's year end 2024 SEC proved reserves, as prepared by an independent third-party reserve engineer, were 2.0 MBoe.

The SEC twelve-month first day of month average used for year end 2024 was $75.48 per Bbl for oil and $2.13 per Mcf of natural gas, a reduction of 4% and 19% for oil and natural gas respectively when compared to year end 2023 SEC pricing. The year end 2024 SEC proved reserves were comprised of 81% oil and 19% natural gas. The 2024 year end proved reserves were 100% classified as proved developed producing ("PDP").

The present value of the Company's reported SEC proved reserves, discounted at 10% ("PV-10"), at year-end 2024 was $29.1 million.

CONFERENCE CALL DETAILS

A conference call will be held Wednesday, March 13, 2025, 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). To listen to a replay of the teleconference, which will be available through March 27, 2025, call by dialing 844-512-2921 (U.S.) or 412-317-6671 (International) and using access ID 13752067.

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; 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, 2024. 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) 
 
                                              2024        2023 
                                            ---------   --------- 
ASSETS 
Current assets: 
  Cash and equivalents                      $   7,723   $   3,351 
  Oil and natural gas sales receivables         1,298       2,336 
  Marketable equity securities                    131         164 
  Commodity derivative asset                        -       1,844 
  Other current assets                            572         527 
  Real estate assets held for sale, net of 
   selling costs                                    -         150 
                                             --------    -------- 
 
     Total current assets                       9,724       8,372 
                                             --------    -------- 
 
Oil and natural gas properties under full 
cost method: 
  Evaluated properties                        142,029     176,679 
  Less accumulated depreciation, depletion 
   and amortization                          (112,958)   (106,504) 
                                             --------    -------- 
 
     Net oil and natural gas properties        29,071      70,175 
                                             --------    -------- 
 
Unproved industrial gas properties, not 
 subject to amortization                        9,384           - 
 
Other assets: 
  Property and equipment, net                     660         899 
  Right of use asset                              528         693 
  Other assets                                    300         305 
                                             --------    -------- 
 
     Total other assets                         1,488       1,897 
                                             --------    -------- 
 
      Total assets                          $  49,667   $  80,444 
                                             ========    ======== 
 
  LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities: 
  Accounts payable and accrued liabilities  $   5,466   $   4,064 
  Accrued compensation and benefits               850         702 
  Revenue and royalties payable                 4,836       4,857 
  Asset retirement obligations                  1,000       1,273 
  Current lease obligation                        196         182 
                                             --------    -------- 
 
     Total current liabilities                 12,348      11,078 
                                             --------    -------- 
 
Noncurrent liabilities: 
  Credit facility                                   -       5,000 
  Asset retirement obligations                 13,083      17,217 
  Long-term lease obligation                      415         611 
  Deferred tax liability                            -          16 
     Total noncurrent liabilities              13,498      22,844 
                                             --------    -------- 
 
      Total liabilities                        25,846      33,922 
                                             --------    -------- 
 
Commitments and contingencies (Note 9) 
 
Shareholders' equity: 

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