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U.S. Energy Corp. Reports Third Quarter 2013 Highlights and Selected Financial Results

U.S. Energy Corp. Reports Third Quarter 2013 Highlights and Selected Financial
Results

Provides an Operational Update

RIVERTON, Wyo., Nov. 12, 2013 (GLOBE NEWSWIRE) -- U.S. Energy Corp.
(Nasdaq:USEG) (the "Company"), today reported its third quarter 2013
highlights and selected financial results for the three and nine months ended
September 30, 2013, and also provided an operational update.

Selected highlights for the three and nine months ended September 30, 2013

Financial and Operational Results

  *During the three months ended September 30, 2013, the Company produced
    101,987 barrels of oil equivalent ("BOE"), or 1,109 BOE/D from 101 gross
    (15.14 net) wells.
  *Oil and Gas operations produced operating income of $2.5 million during
    the quarter ended September 30, 2013 as compared to operating income of
    $1.7 million during the quarter ended September 30, 2012.
  *The Company recognized $8.6 million in revenues during the three months
    ended September 30, 2013 as compared to $7.6 million during the same
    period of the prior year. The $943,000 increase in revenue is primarily
    due to higher realized oil and gas prices in 2013 when compared to 2012.
  *At September 30, 2013, the Company had $5.5 million in cash and cash
    equivalents on hand. Working capital (current assets minus current
    liabilities) was $5.1 million.
  *On September 11, 2013 the Company completed the sale of the Remington
    Village Apartment Complex located in Gillette, Wyoming to an affiliate of
    the Miller Frishman Group, LLC for $15.0 million. A related commercial
    note in the amount of $9.5 million was paid in full at closing and net
    proceeds to the Company were approximately $5.0 million as a result of the
    sale.
  *The Company recognized $24.4 million in revenues during the nine months
    ended September 30, 2013.
  *During the nine months ended September 30, 2013, we received average
    revenue of $2.7 million per month from our producing wells with an average
    operating cost of $637,000 per month (excluding workover costs), and
    production taxes of $278,000 before non-cash depletion expense, for an
    average cash flow of $1.8 million per month from oil and gas production
    before non-cash depletion expense.
  *General and administrative expenses decreased by $1.4 million during the
    nine months ended September 30, 2013 as compared to general and
    administrative expenses for the nine months ended September 30, 2012.
  *Earnings before interest, income taxes, depreciation, depletion and
    amortization, accretion of discount on asset retirement obligations,
    non-cash impairments, unrealized derivative gains and losses and non-cash
    stock compensation expense ("Modified EBITDAX"), was $11.5 million for the
    nine months ended September 30, 2013, an increase of 16.3% from $9.9
    million for the same period in 2012. Modified EBITDAX is a non-GAAP
    financial measure. Please refer to the reconciliation in this release for
    additional information about this measure.*

Operations Update

South Texas - Buda Limestone formation

Booth-Tortuga Prospect

The Company participates with Contango Oil & Gas Company in approximately
10,140 gross (3,042 net) acres in the Booth-Tortuga acreage block in Dimmit
County, Texas which are prospective for the Buda Limestone and other
formations. The Company has an approximate 30% working interest and an
approximate 22.5% net revenue interest in the acreage.

The Beeler #2H well, our first Buda Limestone formation targeted well began
producing in May 2013.The well has produced approximately 102,500 gross BOE
through October 31, 2013.

In July 2013, the operator spud the second well targeting the Buda formation
in Dimmit County, Texas, the Beeler #3H (~30% WI / ~22.5% NRI). The well was
drilled to a total measured depth of 10,800 feet, including a 3,215 foot
lateral, was completed naturally without fracture stimulation, and commenced
production in September at a peak 24-hour initial rate of 1,260 BOE/D (92%
oil), and had a thirty-day average production rate of 859 BOE/D.

In September 2013, the operator spud the third well targeting the Buda
formation. The Beeler #4H (~30% WI / ~22.5% NRI) was drilled to a total
measured depth of 11,350 feet, including a 3,777 foot lateral. The well was
completed naturally without fracture stimulation, and commenced production at
a peak 24-hour initial rate of 1,430 BOE/D (84% oil), and a thirty-day average
production rate of 1,190 BOE/D.

Currently the operator is drilling the Beeler #5H (~30% WI / ~22.5% NRI) well
targeting the Buda formation. The well is currently drilling at a depth of
7,696 feet, with a planned 3,636 foot lateral.

We expect this rig to remain active in the area for the remainder of this year
and throughout 2014 to continue to delineate and evaluate the Buda potential
over a larger area than has currently been drilled.

Big Wells Prospect

On August 5, 2013, under an area of mutual interest election, the Company also
acquired a 15% working interest (~ 11.25% net revenue interest) in an
additional 4,243 gross acres (~636 net to the Company) from a private oil and
gas company based in San Antonio, Texas. The new leasehold is contiguous to
the southwestern portion of the Booth-Tortuga acreage block held with Contango
Oil and Gas.Under the terms of the election, the leasehold interest is
subject to a 25% back-in upon project payout.

The Willerson #1H well (~ 15% WI / ~11.25% NRI), targeting the Buda formation
was recently completed in the Big Wells prospect at a total measured depth of
11,030 feet, including a 3,300 foot lateral.Initial flow rates have been very
positive, and we will continue to monitor the well and observe performance
before releasing results.

Williston Basin, North Dakota

Bakken and Three Forks formations

Williston Basin Initial Production Rates and Wells in Progress Table:

Well Name         Operator    Formation   Working  Net Revenue Status
                                          Interest Interest
                  Emerald Oil                                  Producing - IP
Talon 1-9-4H     Inc.        Bakken      0.27%    0.21%       Rate 1,311
                                                               BOE/D
                  Emerald Oil                                  Producing - IP
Slugger 1-16-21H  Inc.        Bakken      0.36%    0.28%       Rate 1,342
                                                               BOE/D
Excalibur         Emerald Oil                                  Producing - IP
5-25-36H          Inc.        Bakken      0.82%    0.61%       Rate 1,842
                                                               BOE/D
                  Emerald Oil                                  Producing - IP
Caper 1-15-22H    Inc.        Bakken      0.73%    0.57%       Rate 2,063
                                                               BOE/D
Gene Zumhof       Oasis                                        Producing - IP
Federal 5300      Petroleum   Three Forks 0.41%    0.31%       Rate 3,203
11-23T                                                         BOE/D
                                                               Producing - IP
State 36-1 #4TFH  Statoil     Three Forks 3.64%    2.88%       Rate 3,771
                                                               BOE/D
Excalibur         Emerald Oil Three Forks 0.82%    0.61%       Completing
4-25-36H         Inc.
Excalibur         Emerald Oil                                  Drilled -
3-25-36H         Inc.        Bakken      0.82%    0.61%       completion
                                                               pending
                  Emerald Oil                                  Drilled -
Caper 5-22-15H    Inc.        Bakken      0.73%    0.57%       completion
                                                               pending
                  Emerald Oil                                  Drilled -
Caper 6-22-15H    Inc.        Bakken      0.73%    0.57%       completion
                                                               pending
Wayne Zumhof      Oasis                                        Drilled -
Federal 5300      Petroleum   Three Forks 4.34%    3.25%       completion
44-15T                                                         pending
Aspen Federal     Oasis                                        Drilled -
5300 24-15B       Petroleum   Bakken      4.34%    3.25%       completion
                                                               pending
                                                               Drilled -
Hovde 33-4 #3TFH  Statoil     Three Forks 2.45%    1.94%       completion
                                                               pending
                                                               Drilled -
Hovde 33-4 2TFH   Statoil     Three Forks 2.47%    1.95%       completion
                                                               pending
Hovde 33-4 #4H    Statoil     Bakken      2.45%    1.94%       Drilling
Birch Federal     Oasis       Three Forks 4.34%    3.25%       Drilling
5300 24-15T       Petroleum
Power Federal     Oasis       Bakken      4.34%    3.25%       To Spud Q4 2013
5300 14-15B       Petroleum
                            Average:    2.00%    1.53%       

CEO Statement

"We are pleased to announce our year over year progress in the development of
our oil and gas portfolio as we move into the fourth quarter of 2013.Looking
forward, we are pleased with Contango's decision to continue to develop the
Booth-Tortuga acreage into 2014 as the prospect thus far has produced
encouraging results," said Keith Larsen, CEO of U.S. Energy Corp."We remain
cautiously optimistic about the potential of this program and need to allow
ourselves ample time to further evaluate the initial wells' performance and
assess the project's overall potential with a disciplined development
approach," he added.

Financial Highlights

The following table sets forth selected financial information for the three
and nine months ended September 30, 2013 and 2012.This information is derived
from the financial statements filed with Company's Form 10-Q for the nine
months ended September 30, 2013, and should be read in conjunction with the
financial statements contained therein, including the notes to the financial
statements.

U.S. ENERGY CORP.
CORPORATE PRESENTATIONS
(Unaudited)
(Amounts in thousands, except per share amounts)
                                      
                         September 30, December 31,
                          2013          2012
Balance Sheets:                        
Cash and cash equivalents $5,538      $2,825
Current assets            $11,920     $26,015
Current liabilities       $6,814      $13,253
Working capital           $5,106      $12,762
Total assets              $125,356    $140,827
Long-term obligations     $8,521      $11,457
Shareholders' equity      $110,021    $116,117
                                      
Shares Outstanding        27,682,602   27,652,602

                                                   
                         For the three months ended For the nine months ended
                          September 30,              September 30,
                         2013          2012         2013         2012
Statements of Operations:                                      
Operating revenues        $8,582      $7,639     $24,376    $24,496
Income (loss) from        $359        $(2,709)   $(5,683)   $(4,412)
continuing operations
Other income & expenses   $(1,065)    $(446)     $(786)     $1,048
Benefit from income taxes $--        $1,285     $--       $1,294
Discontinued operations,  $(128)      $(75)      $310       $(1,246)
net of taxes
Net (loss)                $(834)      $(1,945)   $(6,159)   $(3,316)
Net (loss) per share                                           
Basic and diluted         $(0.03)     $(0.07)    $(0.22)    $(0.12)
Weighted average shares                                        
outstanding
Basic and diluted         27,682,602   27,468,355  27,677,382  27,458,249

*Non-GAAP Financial Measures

Modified EBITDAX

In addition to reporting net income (loss) as defined under GAAP, in this
release we also present net earnings before interest, income taxes,
depreciation, depletion, and amortization, accretion of discount on asset
retirement obligations, non-cash impairments, unrealized derivative gains and
losses and non-cash stock compensation expense ("Modified EBITDAX"), which is
a non-GAAP performance measure.Modified EBITDAX excludes certain items that
the Company believes affect the comparability of operating results and can
exclude items that are generally one-time or whose timing and/or amount cannot
be reasonably estimated. Modified EBITDAX is a non-GAAP measure that is
presented because the Company believes that it provides useful additional
information to investors, as a performance measure.Modified EBITDAX does not
represent, and should not be considered an alternative to, GAAP measurements,
such as net income (loss) (its most directly comparable GAAP measure), or as a
measure of liquidity, and our calculations thereof may not be comparable to
similarly titled measures reported by other companies.We also believe that
Modified EBITDAX is useful to investors because similar measures are
frequently used by securities analysts, investors, and other interested
parties in their evaluation of companies in similar industries.Our management
uses Modified EBITDAX to manage our business, including preparation of our
annual operating budget and financial projections.Our management does not
view Modified EBITDAX in isolation and also uses other measurements, such as
net income (loss) and revenues, to measure operating performance.The
following table provides a reconciliation of net income (loss) to Modified
EBITDAX for the periods presented (in thousands):

                         For the three months ended For the nine months ended
                          September 30,              September 30,
                         2013         2012          2013         2012
Net (loss)                $(834)     $(1,945)    $(6,159)   $(3,316)
Impairment of oil and     --         --          5,828       523
natural gas properties
Impairment of corporate   --         1,756        --         1,756
aircraft and facilities
Impairment of Remington   --         --          --         1,261
Village, net of tax
Accretion of asset        10          9            28          25
retirement obligation
Non-cash compensation     151         336          400         465
expense
Unrealized (gain) loss on 768         478          1,056       (1,233)
commodity derivatives
(Benefit from) provision  --         (1,285)      --         (1,294)
for income taxes
Interest expense          71          53           229         128
Depreciation, depletion   3,272       3,562        10,086      11,542
and amortization
Modified EBITDAX          $3,438     $2,964      $11,468    $9,857
(Non-GAAP) ^(*)

About U.S. Energy Corp.

U.S. Energy Corp. is a natural resource exploration and development company
with a primary focus on the exploration and development of its oil and gas
assets.The Company also owns the Mount Emmons molybdenum deposit located in
west central Colorado.The Company is headquartered in Riverton, Wyoming and
trades on the NASDAQ Capital Market under the symbol "USEG".

To view the Company's Financial Statements and Management's Discussion and
Analysis, please see the Company's 10-Q for the three and nine months ended
September 30, 2013 which is available at www.sec.gov and www.usnrg.com.

The U.S. Energy Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5043

                Disclosure Regarding Forward-Looking Statement

This news release includes statements which may constitute "forward-looking"
statements, usually containing the words "will," "anticipates," "believe,"
"estimate," "project," "expect," "target," "goal," or similar
expressions.Forward looking statements in this release relate to, among other
things, U.S. Energy's expected future production and capital expenditures and
projects, its drilling and fracing of wells with industry partners and
potential additional drilling opportunities, its ownership interests in those
wells, the oil and natural gas targets or goals for the wells, future capital
expendituresand projects, future expenses, production, costs and sale
transactions, and activities relating to the Mount Emmons project.There is no
assurance that any of the wells referenced in this press release will be
economic.Initial and current production results from a well are not
necessarily indicative of its longer-term performance.Future transactions may
not close on the terms we anticipate or at all.The forward-looking statements
are made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995.Forward-looking statements inherently involve
risks and uncertainties that could cause actual results to differ materially
from the forward-looking statements.Factors that would cause or contribute to
such differences include, but are not limited to, dry holes and other
unsuccessful development activities, higher than expected expenses or decline
rates from production wells, future trends in commodity and/or mineral prices,
the availability of capital, competitive factors, and other risks described in
the Company's filings with the SEC (including, without limitation, the Form
10-K for the year ended December 31, 2012 and the Form 10-Q for the quarter
ended September 30, 2013) all of which descriptions are incorporated herein by
reference.By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revision or changes after the
date of this release.

CONTACT: For further information, please contact:
        
         Reggie Larsen
         Director of Investor Relations
         U.S. Energy Corp.
         1-800-776-9271
         Reggie@usnrg.com

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