US Energy Corp. announces a targeted acquisition of assets

HOUSTON, May 03, 2022 (GLOBE NEWSWIRE) — US Energy Corp. (NASDAQCM: USEG) (“US Energy” or the “Company”) today announced that the Company has acquired oil and gas properties in an all-cash transaction (the “Transaction”). The properties (the “Properties”) are located primarily in Liberty County, Texas adjacent to the Company’s existing assets in the area.

Acquisition Highlights

  • Proved Developed Producing (“PDP”) PV-10 valued at $2.3 million.
  • PDP reserves are estimated at approximately 88,510 barrels of oil.
  • Includes the Panther City pipeline and associated infrastructure.
  • Approximately 1,022 net acres owned 100% 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 reinforces US Energy’s stated strategy of consolidating assets that represent cash flow positive properties into existing areas of the company that have significant growth potential.” , said Ryan Smith, President and CEO of US Energy, who continued, “The properties are being purchased at a substantial discount to their current PDP PV-10 reserve value while adding long-life oil reserves of life and immediate free cash flow to the U.S. Energy portfolio.Combined with our current infrastructure in the region, the acquired properties contain numerous candidates for highly economic return on production opportunities from existing wells. note that with US Energy’s acquisition of the Panther City pipeline, short-term gas sales and shifting third-party gas volumes has an added benefit, improving both the economic and environmental impact of the entire region. US Energy’s latest acquisition is another example of how the company is leveraging its low-cost corporate structure and healthy balance sheet to acquire assets at attractive valuations while using our expertise to achieve economic growth. and improving the environmental footprint in the areas where we operate. .”

Overview of acquired properties

As of April 1, 2022, the properties had proven developed production reserves estimated at approximately 88,510 barrels of oil and had a present value of estimated future net revenues before income taxes discounted at 10% (“PV10”) of approximately 2 .3 million. The properties are operated with a working interest of 97% and a net revenue interest of 69%. The properties also contain approximately 1,022 net acres which are 100% owned by production.

The consideration payable for the assets is $1.0 million in cash, which is funded from existing cash on hand at US Energy.

Estimates for properties
as of April 1, 2022**
Proven Developed Oil Producing Reserves (Bbls) 88,510
Proved developed non-oil producing reserves (Bbls)
Total proven developed oil reserves (bls) 88,510
PV10 (thousands of dollars)* $ 2,254
*Pricing per band as of April 2, 2022.
** Company internal engineering as of April 1, 2022.

About US Energy Corp.

We are a growth company focused on consolidating high-quality U.S. production assets with the potential to optimize production and generate free cash flow through low-risk development while maintaining a program attractive return for shareholders. We are committed to respecting ESG and to being a leader in reducing our carbon footprint in the areas where we operate. For more information about US Energy Corp., visit www.usnrg.com.

Forward-looking statements

Certain of the matters discussed in this communication that are not statements of historical fact constitute forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy”, “expect”, “continue”, “plan”, “anticipate”, “believe”, “would”, “will”, “estimate”, “intend” , “projects”, “goals”, “targets” and other words of similar meaning are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

Important factors that may cause actual results and results to differ materially from those contained in these forward-looking statements include, but are not limited to, risks associated with the integration of recently acquired assets; the Company’s ability to recognize the expected benefits of acquisitions and the risk that the expected benefits and synergies of the acquisition may not be fully realized in a timely manner, if at all; the amount of costs, fees, costs and charges related to the acquisitions; the Company’s ability to meet the terms of its senior credit facilities; the Company’s ability to retain and hire key personnel; the business, economic and political conditions of 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 production rates and timing of development activities; competition; operational risks; acquisition risks; liquidity and capital requirements; the effects of government regulation; adverse changes in the market for the Company’s oil and natural gas production; dependence on third-party suppliers; risks associated with COVID-19, global efforts to stop the spread of COVID-19, potential slowdowns in the U.S. and global economies due to COVID-19 and efforts to stop the spread of the virus, and COVID-19 in general ; economic uncertainty related to rising inflation and global conflicts; the lack of capital available on acceptable terms to fund the continued growth of the Company; and other risk factors included from time to time in US Energy’s filings with the Securities and Exchange Commission, including, but not limited to, its Forms 10-K, 10-Q, and 8-K . Other important factors that could cause actual results and results to differ materially from those contained in the forward-looking statements included in this communication are described in the company’s public reports, including, but not limited to, the the company’s annual report on Form 10-K for the fiscal year ended December 31, 2021. These reports and documents 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 anyone acting on behalf of the parties to the Sales Agreement are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors could also materially adversely affect US Energy’s future results. The forward-looking statements included in this press release speak only as of the date hereof. US Energy cannot guarantee future results, activity levels, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, US Energy undertakes no obligation to update these statements after the date of this release, except as required by law, and undertakes no obligation to update or correct information prepared by third parties that are not paid by US Energy. If we update one or more forward-looking statements, no conclusion should be drawn that we will make additional updates with respect to such or other forward-looking statements.


        

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