US Energy (USEG) Q1 2025 Earnings Call May 12, 2025 09:00 AM ET Speaker0 Greetings, and welcome to the U. S. Energy Corporation's First Quarter twenty twenty five Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mason Maguire, Vice President of Finance and Strategy. Thank you, sir. You may begin. Speaker1 Th ...

Financial Performance - Total revenue for Q1 2025 was $2,193,000, a decrease of 59.3% compared to $5,391,000 in Q1 2024[19] - Operating loss for Q1 2025 was $3,088,000, improved from an operating loss of $8,022,000 in Q1 2024[19] - Net loss for Q1 2025 was $3,111,000, compared to a net loss of $9,537,000 in Q1 2024, representing a 67.4% reduction[19] - Basic and diluted loss per share improved to $0.10 in Q1 2025 from $0.38 in Q1 2024[19] - The net loss attributable to common shareholders for the three months ended March 31, 2025, was $3,111,000, compared to a net loss of $9,537,000 for the same period in 2024, representing a 67.4% improvement[78] - Basic and diluted net loss per share for the three months ended March 31, 2025, was $(0.10), compared to $(0.38) for the same period in 2024[78] Cash and Liquidity - Cash and equivalents increased to $10,502,000 as of March 31, 2025, up from $7,723,000 at the end of 2024[23] - Cash used in operating activities was $4.544 million for the three months ended March 31, 2025, compared to $603 thousand in 2024, mainly due to a net loss of $3.1 million[137] - Cash used in investing activities was $2.422 million, significantly higher than $179 thousand in the comparable period of 2024, primarily due to the Synergy acquisition[138] - Cash provided by financing activities was $9.745 million, a substantial increase from cash used of $563 thousand in 2024, driven by an equity offering that raised $11.9 million[139] - As of March 31, 2025, the Company had no outstanding amounts under the Credit Agreement after repaying the remaining balance of $2.0 million on September 10, 2024[52] Assets and Liabilities - Total assets rose to $55,835,000 as of March 31, 2025, compared to $49,667,000 at the end of 2024, reflecting a 12.4% increase[18] - Total liabilities decreased to $22,277,000 as of March 31, 2025, down from $25,846,000 at the end of 2024, a reduction of 13.1%[18] - Shareholders' equity increased to $33,558,000 as of March 31, 2025, compared to $23,821,000 at the end of 2024, marking a 40.9% increase[18] Revenue Breakdown - In the Rockies region, oil revenue decreased to $1.357 million from $1.721 million, while natural gas and liquids revenue increased to $69,000 from $41,000[41] - Oil revenue fell by 63% to $1.77 million, while natural gas and liquids revenue decreased by 36% to $423,000 for the same period[119] - Production quantities dropped by 57%, with 47,008 barrels of oil equivalent (BOE) produced in Q1 2025, down from 109,800 BOE in Q1 2024[119] - The average sales price for oil decreased by 14% to $59.01 per barrel, while the average sales price for natural gas and liquids increased by 54% to $4.14 per Mcfe[119] Acquisitions and Investments - The company acquired industrial gas properties for $2,128,000 during Q1 2025[23] - The Company acquired 24,000 net operated acres in Montana for a total consideration of $4.7 million, which includes $2.0 million in cash and 1,400,000 shares of common stock[39] - The company plans to use proceeds from the stock offering for the development of its recent acquisition in Montana and general corporate purposes[58] Shareholder Activities - The company issued 4,871,400 shares in an underwritten offering, netting $11,877,000[21] - The ongoing share repurchase program has been extended until June 30, 2026, with $5.0 million authorized for repurchases[110] - During the first quarter of 2025, the company repurchased a total of 125,600 shares at an average price of $1.87 per share, with a remaining authorization of approximately $3,596,161 under the share repurchase program[152] Operational Costs - For the three months ended March 31, 2025, total oil and natural gas production costs decreased to $1.773 million, a reduction of $1.820 million or 51% compared to $3.593 million in 2024[120] - Lease operating expenses were $1.609 million, down $1.577 million or 49% from $3.186 million in the prior year, while lease operating expense per BOE increased by 18% to $34.23[120] - Gathering, transportation, and treating costs fell to $16 thousand, a decrease of $48 thousand or 75% compared to the same period in 2024[121] - Production taxes decreased to $148 thousand, down $195 thousand or 57% from $343 thousand in 2024, remaining between 6% and 7% of revenue[122] - General and administrative expenses increased to $2.389 million, an increase of $183 thousand or 8% compared to $2.206 million in 2024, primarily due to higher professional fees and stock-based compensation[125] Financial Reporting and Controls - The Company is currently assessing the impact of new accounting standards on its financial disclosures, including ASU 2023-09 and ASU 2024-03[34][36] - As of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls were not effective due to a material weakness in internal control over financial reporting as of December 31, 2024[143] - A material weakness was identified related to the accounting system, which lacked certain functionalities such as system-based account reconciliations and independent evaluation of third-party IT controls[144] - The company began outsourcing day-to-day accounting to a third-party provider in January 2025, aiming to remediate the material weakness by year-end 2025[146] - There were no changes in internal control over financial reporting during the three months ended March 31, 2025, that materially affected the company's internal controls[147] Risk Factors and Future Outlook - Significant credit risk exists, with Purchaser A accounting for 46% of total oil and natural gas revenue for the three months ended March 31, 2025, compared to 28% in 2024[42] - The company expects to record a write-down of oil and natural gas properties in the second quarter of 2025, estimated between $7.0 million and $8.0 million, due to lower commodity prices[92] - The company anticipates capital expenditures for industrial gas development to range between $3.5 million and $4.5 million in 2025[130] - The company is not currently involved in any legal proceedings that could materially affect its business or financial condition[149] - There have been no material changes to the risk factors previously disclosed in the Annual Report for the year ended December 31, 2024[151]

Production and Sales - U.S. Energy reported total hydrocarbon production of approximately 47,008 BOE in Q1 2025, with oil production accounting for 64% of total output[13] - Total oil and gas sales for Q1 2025 were approximately $2.2 million, a decrease from $5.4 million in Q1 2024, primarily due to divestitures and declining oil prices[13] - Total revenue for Q1 2025 was $2,193,000, a decrease of 59.3% compared to $5,391,000 in Q1 2024[26] Reserves and Assets - The company's proved developed producing (PDP) reserves as of March 31, 2025, were approximately 2.0 million BOE, with a present value discounted at 10% of approximately $28.7 million[12] - Total current assets increased to $12,091,000 in Q1 2025 from $9,724,000 in Q4 2024, reflecting a 24.5% growth[24] - Total assets rose to $55,835,000 in Q1 2025, up from $49,667,000 in Q4 2024, indicating a 12.5% increase[24] - Total liabilities decreased to $22,277,000 in Q1 2025 from $25,846,000 in Q4 2024, a reduction of 13.5%[24] Financial Performance - The company reported a net loss of $3.1 million, or a loss of $0.10 per diluted share, in Q1 2025, compared to adjusted EBITDA of ($1.5) million[16] - Net loss for Q1 2025 was $3,111,000, compared to a net loss of $9,537,000 in Q1 2024, representing a 67.4% improvement[26] - Adjusted EBITDA for Q1 2025 was $(1,498,000), a decline from $237,000 in Q1 2024[31] - Cash general and administrative expenses for Q1 2025 were approximately $1.9 million, reflecting an 18% decrease from $2.0 million in Q1 2024[15] - Operating expenses for Q1 2025 totaled $5,281,000, down 60.7% from $13,413,000 in Q1 2024[26] - The company incurred no impairment of oil and natural gas properties in Q1 2025, compared to $5,419,000 in Q1 2024[26] Liquidity and Capital Management - U.S. Energy ended Q1 2025 with approximately $30.5 million in total liquidity, remaining entirely debt-free[10] - Cash and equivalents at the end of Q1 2025 were $10,502,000, up from $7,723,000 at the end of Q4 2024, marking a 36.5% increase[28] Future Projects - U.S. Energy achieved a sustained gas injection rate of 17.0 MMcf/d, projected to sequester approximately 240,000 metric tons of CO₂ annually[7] - The company has budgeted $1.3 million for each of two new industrial gas wells targeting the Duperow formation, with completion expected by early June 2025[8] - Construction of the initial gas processing plant, capable of processing 17.0 MMcf/d, is scheduled to begin in July 2025 at a capital cost of approximately $15 million[8] Shareholder Actions - U.S. Energy repurchased approximately 832,000 shares year-to-date, representing 2.5% of outstanding shares, reflecting strong alignment with shareholders[17]

Core Insights - U.S. Energy Corporation is focused on becoming a leading provider of non-hydrocarbon industrial gases, with significant progress in its Montana development project [2][3] - The company has a disciplined capital allocation strategy, having divested legacy oil and gas assets, eliminated debt, and returned capital to shareholders through share repurchases [2][8] Financial Performance - For Q1 2025, U.S. Energy reported total hydrocarbon production of approximately 47,008 barrels of oil equivalent (BOE), with oil production accounting for 64% [11] - Total oil and gas sales for Q1 2025 were approximately $2.2 million, a decrease from $5.4 million in Q1 2024, primarily due to divestitures and declining oil prices [11] - The company reported a net loss of $3.1 million, or a loss of $0.10 per diluted share, compared to a net loss of $9.5 million in the same quarter of 2024 [14][24] Operational Developments - U.S. Energy has acquired 24,000 net acres in the Kevin Dome, with the Kiefer Farms well demonstrating helium concentrations of approximately 0.6% and flow rates exceeding 3.2 million cubic feet per day (MMcf/d) [6][10] - The company is set to begin construction of its gas processing plant in July 2025, which will have a processing capacity of 17.0 MMcf/d at a capital cost of approximately $15 million [6][10] Carbon Management Initiatives - The company is projected to permanently sequester approximately 240,000 metric tons of CO₂ annually through its gas injection activities [13] - U.S. Energy has submitted an application for a new Class II injection well, with approval expected in June 2025 [13] Balance Sheet and Liquidity - As of March 31, 2025, U.S. Energy remained entirely debt-free, with approximately $30.5 million in available liquidity [8][9] - The company ended Q1 2025 with a cash balance of $10.5 million, an increase from $7.7 million at the end of 2024 [9][21] Shareholder Returns - U.S. Energy has repurchased approximately 832,000 shares year-to-date, representing about 2.5% of its outstanding shares, reflecting strong alignment with shareholders [15]

HOUSTON, May 08, 2025 (GLOBE NEWSWIRE) -- U.S. Energy Corporation (NASDAQ: USEG, “U.S. Energy” or the “Company”), a growth-focused energy company engaged in the development and operation of high-quality producing energy and industrial gas assets, today announced that it will issue first quarter 2025 results before the market opens on Monday, May 12, 2025. A conference call will be held Monday, May 12, 2025, at 9:00 a.m. ET/8:00 a.m. CT to review the Company’s financial results, discuss recent events and con ...

Core Viewpoint - U.S. Energy Corporation has completed a strategic acquisition for $0.2 million, enhancing its industrial gas and carbon capture platform in Montana, which includes approximately 2,300 net acres with CO2 rights and an active Class II injection well for CO2 sequestration [1][3][5] Acquisition Details - The acquisition strengthens U.S. Energy's position in the Kevin Dome structure, known for its helium-rich and CO2-dominated gas systems [5] - The Class II injection well is permitted by the U.S. Environmental Protection Agency (EPA) under the Safe Drinking Water Act, ensuring compliance for safe CO2 storage [2][5] Strategic Implications - This acquisition aligns with U.S. Energy's broader strategy to develop scalable, low-emission industrial gas operations and positions the company as a supplier of clean helium and other critical gases [3][4] - The company plans to submit a Monitoring, Reporting, and Verification (MRV) plan to the EPA for the Class II well in Q2 2025, supporting its environmental goals [5] Management Commentary - The CEO of U.S. Energy emphasized that the acquisition is a significant milestone in integrating carbon sequestration into the industrial gas platform, enhancing the company's ability to deliver clean helium while sequestering CO2 at scale [4]

HOUSTON, April 16, 2025 (GLOBE NEWSWIRE) -- U.S. Energy Corporation (NASDAQ: USEG, “U.S. Energy” or the “Company”) today announced the closing of a strategic acquisition (the “Acquisition”) from a privately held company for $0.2 million, strengthening its industrial gas and carbon capture platform in Montana. As part of the Acquisition, U.S. Energy acquired approximately 2,300 net acres with carbon dioxide (CO2) rights that are highly contiguous to its existing position across Montana’s Kevin Dome structure ...

U.S. Energy invites individual and institutional investors as well as advisors and analysts to attend its interactive presentation at the Emerging Growth Conference. This live, interactive online event will give existing shareholders and the investment community the opportunity to interact with the Company's President and CEO, Ryan Smith. Ryan will deliver a company overview and may subsequently open the floor to questions. Please submit questions in advance to Questions@EmergingGrowth.com. U.S. Energy will ...

HOUSTON, March 13, 2025 (GLOBE NEWSWIRE) -- U.S. Energy Corp (NASDAQ: USEG, “U.S. Energy” or the “Company”), a growth-focused energy company engaged in operating a portfolio of high-quality producing assets, announced today that it will participate in the 37th Annual Roth Conference from March 17-18, 2025. U.S. Energy will participate in discussion panels as well as engage in one-on-one meetings with institutional investors and analysts. The conference will be at the Laguna Cliffs Marriott Resort & Spa loca ...

US Energy (NASDAQ:USEG) Q4 2024 Earnings Conference Call March 13, 2025 9:00 AM ET Company Participants Mason McGuire ??? Vice President-Finance and Strategy Ryan Smith ??? Chief Executive Officer Mark Zajac ??? Chief Financial Officer Conference Call Participants Jesse Sobelson ??? D. Boral Capital Charles Meade ??? Johnson Rice Tom Kerr ??? Zacks Small Cap Research Operator Greetings and welcome to U.S. Energy Corporation Fourth Quarter and Year End 2024 Results Conference Call. At this time, all particip ...