U.S. Energy Corp. Announces Second Quarter Financial and Operating Results

·19 min read
U.S. Energy Corp.
U.S. Energy Corp.

HOUSTON, Aug. 11, 2022 (GLOBE NEWSWIRE) -- U.S. Energy Corp. (NASDAQCM: USEG) (“We”, “U.S. Energy” or the “Company”) today announced financial and operating results for the second quarter ended June 30, 2022.

Quarterly Highlights and Recent Developments

  • Oil and gas revenues of $13.5 million, an increase of 714% from the comparable period of 2021.

  • Production of 162,230 barrels of oil equivalent (“BOE”), or daily production of 1,783 BOE per day (“BOEPD”), an increase of 406% from the comparable period of 2021.

  • Mid-year 2022 Proved Developed Producing (“PDP”) reserves of 8.0 Mmboe (66% oil).1

  • Mid-year 2022 PDP present value of estimated future net revenues before income taxes, discounted at 10% (“PV-10”) of $167.1 million using current SEC pricing.1

  • Adjusted EBITDA2 of $5.1 million. Adjusted EBITDA is a non-GAAP financial measure and is reconciled to GAAP below.

  • Announced a highly accretive acquisition of operated, gas-weighted assets in Henderson and Anderson counties, Texas. The transaction closed on July 27, 2022.

Management Comments

U.S. Energy’s Chief Executive Officer, Ryan Smith said "We continued to execute on our strategy to acquire and develop high-quality producing assets, as evidenced by the Company’s stellar second quarter. With the completion of the integration of our transformational January 2022 acquisitions, we remain committed to delivering strong results which reflect the success of our consolidation strategy. We are just beginning to realize the production uplift from our recently announced East Texas acquisition, which closed after the second quarter end, and anticipate using the high-margin cash flow generation from the asset to maintain our clean capital structure and consistent shareholder returns framework. As we continue into the second half of 2022, U.S. Energy remains focused on disciplined capital allocation and accretive growth opportunities that continue to provide significant value to shareholders.”

Second Quarter 2022 Production Update

For the three months ended June 30, 2022, we produced 162,230 BOE, or an average of 1,783 BOEPD, as compared to 32,073 BOE or 352 BOEPD during the comparable period in 2021. U.S. Energy’s production growth has primarily been driven by the integration of operated assets acquired in January 2022 and the Company’s efforts in optimizing legacy production operations.

 

2nd Quarter
2022

 

 

2nd Quarter
2021

 

Sales Volume (Total)

 

 

 

 

 

Oil (Bbls)

 

107,845

 

 

 

24,077

 

Gas and liquids (Mcfe)

 

326,308

 

 

 

47,979

 

Sales volumes (Boe)

 

162,230

 

 

 

32,073

 

 

 

 

 

 

 

Average Daily Production (Boe/d)

 

1,783

 

 

 

352

 

 

 

 

 

 

 

Average Sales Prices

 

 

 

 

 

Oil (Bbl)

$

105.09

 

 

$

62.59

 

Gas and liquids (Mcfe)

$

6.58

 

 

$

3.10

 

Barrel of Oil Equivalent

$

83.09

 

 

$

51.62

 

Estimated Proved Reserves at July 1, 2022 at SEC Pricing

As shown in the table below, the Company's estimated total proved reserves at July 1, 2022, which were prepared in accordance with Securities and Exchange Commission ("SEC") guidelines by an independent petroleum engineering firm, were approximately 8,103 Mboe with a present value of estimated future net revenues before income taxes, discounted at 10% (“PV-10”) of $174.1 million at July 1, 2022 using current SEC pricing of $85.78 per barrel of oil and $5.13 per thousand cubic feet of natural gas. Please note that the Company’s recent East Texas acquisition is included in the mid-year reserve report shown below.

 

 

As of 7/1/2022
SEC Pricing (1)

Proved Developed Oil Reserves (“PDP”) (MBbls)

 

 

5,230

 

Proved Developed Non-Producing Oil Reserves (“PDNP”) (MBbls)

 

 

142

 

Total Proved Oil Reserves (MBbls)

 

 

5,372

 

 

 

 

Proved Developed Gas Reserves (MMcf)

 

 

16,393

 

Proved Developed Non-Producing Gas Reserves (MMcf)

 

 

(7

)

Total Proved Gas Reserves (MMcf)

 

 

16,387

 

 

 

 

Total Proved Reserves (MBoe)

 

 

8,103

 

 

 

 

PDP Reserves PV-10 (000’s)

 

$

167,121

 

PDNP Reserves PV-10 (000’s)

 

$

6,949

 

Total PDP and PDNP Reserves PV-10 (000’s)

 

$

174,069

 

12q2022 SEC pricing of $85.78 oil and $5.13 natural gas

Second Quarter Ended June 30, 2022 Financial Results

Revenues from sales of oil and natural gas during the second quarter of 2022 were $13.5 million compared to $1.7 million during the comparable period of 2021. The change in revenue was primarily attributable to an increase in oil production volumes from the properties acquired in January 2022 and an improvement in realized commodity prices. Revenue from oil production represented 84% of our revenue during the quarter.

During the second quarter of 2022, we realized an average oil sales price of $105.09 per Bbl and an average gas and liquids sales price of $6.58 per Mcfe for an overall average sales price of $83.09 per BOE compared to an average oil sales price of $62.59 per Bbl and an average gas and liquids sales price of $3.10 per Mcfe for an average sales price of $51.62 BOE during the comparable period of 2021.

Lease operating expenses during the second quarter of 2022 were $4.6 million compared to $0.5 million during the comparable period of 2021. The increase in lease operating expenses was due to increased activity as the result of the properties acquired in January 2022 combined with overall service cost and materials inflation.

General and administrative (“G&A”) cash expenses totaled $2.0 million during the second quarter of 2022, primarily related to increased employee headcount following the Company’s January 2022 transaction. Non-cash stock-based compensation totaled $0.6 million for the quarter.

Net income was $0.1 million and Adjusted EBITDA was $5.1 million for the second quarter of 2022. Adjusted EBITDA is a non-GAAP financial measure and is reconciled to GAAP below.

Second Quarter Ended June 30, 2022 M&A and Subsequent Activity

On May 3, 2022, the Company acquired operated oil and gas producing properties in Liberty County, Texas, adjacent to its existing assets in the area, for $1.0 million in an all-cash transaction. The effective date of the transaction is April 1, 2022. The producing, oil-weighted assets include the Panther City Pipeline and associated gas gathering infrastructure.

On June 30, 2022, the Company announced that it entered into an agreement to acquire approximately 16,600 net acres and certain wells and gathering systems located in Henderson and Anderson Counties, Texas. The transaction closed on July 27, 2022, with an effective date of June 1, 2022. The all-cash purchase price was $11.875 million, less purchase price adjustments. The operated, gas-weighted assets are adjacent to existing assets of the Company.

Shareholder Returns

Consistent with U.S. Energy’s stated strategy of meaningful capital returns to shareholders, on July 18, 2022, the Company’s board of directors declared a $0.0225 per share dividend for shareholders of record as of August 8, 2022. The dividend will be paid by U.S. Energy on August 22, 2022. Subject to board approval, U.S. Energy intends to pay a quarterly dividend on a continuing basis.

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 ESG stewardship and being a leader in 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.

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 increased inflation, interest rates and possible recessions; the Company’s ability to comply with the terms of its senior credit facilities and repay amounts borrowed thereunder; 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; drilling, completions, workovers and other activities and the anticipated costs and results of such activities; the Company’s anticipated operational results for 2022 including, but not limited to, estimated or anticipated production levels, capital expenditures and drilling plans; acquisition risks; liquidity and capital requirements; the effects of governmental regulation; anticipated future production and revenue; drilling plans including the timing of drilling, commissioning, and startup and the impact of delays thereon; 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; 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, 2021 and the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2022. These reports and filings are available at www.sec.gov. Without limitation of the foregoing, future dividend payments, if any, and the level thereof, are uncertain, as the Company's dividend policy and the funds available for the payment of dividends from time to time is dependent upon, among other things, free cash flow financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of the Company to pay dividends will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness.

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 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.

Reserve Information

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reservoir engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact the Company’s strategy and change the schedule of any further production and development drilling. While we believe these estimates and the assumptions on which they are based are reasonable as of the date on which they are made, they are inherently uncertain and are subject to, among other things, significant business, economic, operational, and regulatory risks, and uncertainties, some of which are not known as of the date of the statement. These estimates do not take into account any derivatives contracts we have entered into to hedge future commodity prices. Guidance and estimates, and the assumptions on which they are based, are subject to material revision. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered and/or as disclosed herein. The reserve information in this press release, including standardized measure and PV-10 are preliminary estimates that have not yet been audited or reviewed and are subject to material revision. These are estimates that should not be regarded as a representation. Investors should not place undue reliance on these estimates. The reserves and PV-10 estimates discussed herein are based on an internal reserves report prepared on July 28, 2022, with estimated valuation information based on SEC pricing as of July 1, 2022 of $85.78 per barrel of oil and $5.13 per thousand cubic feet of natural gas.


Financial Statement Presentation and Reconciliation

U.S. ENERGY CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

 

 

June 30,
2022

 

 

December 31,
2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and equivalents

 

$

2,467

 

 

$

4,422

 

Oil and natural gas sales receivable

 

 

6,131

 

 

 

933

 

Marketable equity securities

 

 

150

 

 

 

191

 

Prepaid and other current assets

 

 

897

 

 

 

179

 

Real estate assets held for sale, net of selling costs

 

 

250

 

 

 

250

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

9,895

 

 

 

5,975

 

 

 

 

 

 

 

 

 

 

Oil and natural gas properties under full cost method:

 

 

 

 

 

 

 

 

Unevaluated properties

 

 

1,584

 

 

 

1,588

 

Evaluated properties

 

 

187,116

 

 

 

95,088

 

Less accumulated depreciation, depletion, amortization and impairment

 

 

(92,145

)

 

 

(88,195

)

 

 

 

 

 

 

 

 

 

Net oil and natural gas properties

 

 

96,555

 

 

 

8,481

 

 

 

 

 

 

 

 

 

 

Pending acquisition

 

 

592

 

 

 

2,767

 

Property and equipment, net

 

 

589

 

 

 

188

 

Right-of-use asset

 

 

997

 

 

 

120

 

Other assets

 

 

348

 

 

 

132

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

108,976

 

 

$

17,663

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

6,921

 

 

$

1,447

 

Accrued compensation and benefits

 

 

487

 

 

 

1,162

 

Commodity derivative liability-current

 

 

6,325

 

 

 

-

 

Asset retirement obligations-current

 

 

1,845

 

 

 

-

 

Premium finance note

 

 

377

 

 

 

-

 

Warrant liability

 

 

-

 

 

 

19

 

Current lease obligation

 

 

157

 

 

 

114

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

16,112

 

 

 

2,742

 

 

 

 

 

 

 

 

 

 

Credit facility

 

 

4,000

 

 

 

-

 

Commodity derivative liability-noncurrent

 

 

1,308

 

 

 

-

 

Asset retirement obligations- noncurrent

 

 

10,366

 

 

 

1,461

 

Lease obligation- non-current

 

 

880

 

 

 

19

 

Other long-term liabilities

 

 

6

 

 

 

6

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

32,672

 

 

 

4,228

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value; unlimited shares authorized; 24,923,812 and 4,676,301 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

249

 

 

 

47

 

Additional paid-in capital

 

 

215,783

 

 

 

149,276

 

Accumulated deficit

 

 

(139,728

)

 

 

(135,888

)

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

76,304

 

 

 

13,435

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

108,976

 

 

$

17,663

 


U.S. ENERGY CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(In thousands, except share and per share amounts)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil

 

$

11,334

 

 

$

1,507

 

 

$

19,167

 

 

$

2,639

 

Natural gas and liquids

 

 

2,146

 

 

 

149

 

 

 

3,185

 

 

 

228

 

Total revenue

 

 

13,480

 

 

 

1,656

 

 

 

22,352

 

 

 

2,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

4,646

 

 

 

477

 

 

 

7,382

 

 

 

1,045

 

Production taxes

 

 

913

 

 

 

131

 

 

 

1,485

 

 

 

210

 

Depreciation, depletion, accretion and amortization

 

 

2,571

 

 

 

146

 

 

 

4,457

 

 

 

264

 

General and administrative expenses

 

 

2,642

 

 

 

812

 

 

 

5,588

 

 

 

1,547

 

Total operating expenses

 

 

10,772

 

 

 

1,566

 

 

 

18,912

 

 

 

3,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

2,708

 

 

 

90

 

 

 

3,440

 

 

 

(199

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative loss

 

 

(2,132

)

 

 

(317

)

 

 

(8,969

)

 

 

(210

)

Marketable equity securities gain (loss)

 

 

(121

)

 

 

23

 

 

 

(40

)

 

 

73

 

Other income (expense), net

 

 

(5

)

 

 

3

 

 

 

(6

)

 

 

25

 

Interest, net

 

 

(60

)

 

 

(6

)

 

 

(108

)

 

 

(58

)

Total other non-operating expense

 

 

(2,318

)

 

 

(297

)

 

 

(9,123

)

 

 

(170

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before income taxes

 

$

390

 

 

$

(207

)

 

$

(5,683

)

 

$

(369

)

Income tax (expense) benefit

 

 

(268

)

 

 

-

 

 

 

2,421

 

 

 

-

 

Net income (loss)

 

$

122

 

 

$

(207

)

 

$

(3,262

)

 

$

(369

)

Basic weighted shares outstanding

 

 

24,923,812

 

 

 

4,676,301

 

 

 

24,323,859

 

 

 

4,304,612

 

Diluted weighted shares outstanding

 

 

25,265,180

 

 

 

4,676,301

 

 

 

24,323,859

 

 

 

4,304,612

 

Basic earnings (loss) per share

 

$

0.00

 

 

$

(0.04

)

 

$

(0.13

)

 

$

(0.09

)

Diluted earnings (loss) per share

 

$

0.00

 

 

$

(0.04

)

 

$

(0.13

)

 

$

(0.09

)


U.S. ENERGY CORP. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(in thousands)

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(3,262

)

 

$

(369

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion, accretion, and amortization

 

 

4,457

 

 

 

264

 

Deferred income taxes

 

 

(2,460

)

 

 

-

 

Unrealized loss (gain) on commodity derivatives

 

 

4,482

 

 

 

170

 

Loss (gain) on marketable equity securities

 

 

40

 

 

 

(73

)

Amortization of debt issuance costs

 

 

20

 

 

 

-

 

Loss on warrant revaluation

 

 

-

 

 

 

24

 

Loss on related party debt conversion and settlement of legal costs

 

 

-

 

 

 

76

 

Stock-based compensation

 

 

2,109

 

 

 

195

 

Right of use asset amortization

 

 

75

 

 

 

42

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Oil and natural gas sales receivable

 

 

(5,198

)

 

 

(208

)

Other assets

 

 

(192

)

 

 

(39

)

Accounts payable and accrued liabilities

 

 

4,315

 

 

 

(509

)

Accrued compensation and benefits

 

 

(675

)

 

 

(125

)

Payments on operating lease liability

 

 

(49

)

 

 

(39

)

Net cash provided by (used in) operating activities

 

 

3,662

 

 

 

(591

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of proved properties

 

 

(4,383

)

 

 

-

 

Oil and natural gas capital expenditures

 

 

(1,131

)

 

 

(904

)

Expenditures for pending acquisition

 

 

(592

)

 

 

-

 

Property and equipment expenditures

 

 

(295

)

 

 

(23

)

Proceeds from sale of oil and gas properties

 

 

1,231

 

 

 

30

 

Payment received on note receivable

 

 

-

 

 

 

20

 

Net cash used in investing activities

 

 

(5,170

)

 

 

(877

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of common stock, net of issuance costs

 

 

-

 

 

 

5,283

 

Borrowings on credit facility

 

 

4,500

 

 

 

-

 

Repayment of debt

 

 

(3,847

)

 

 

-

 

Payment of fees for credit facility

 

 

(174

)

 

 

 

-

Repayments of insurance premium finance note payable

 

 

(236

)

 

 

(48

)

Exercise of warrant

 

 

195

 

 

 

-

 

Shares withheld to settle tax withholding obligations for restricted stock awards

 

 

(307

)

 

 

(39

)

Dividend paid

 

 

(578

)

 

 

-

 

Net cash (used in) provided by financing activities

 

 

(447

)

 

 

5,196

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and equivalents

 

 

(1,955

)

 

 

3,728

 

Cash and equivalents, beginning of period

 

 

4,422

 

 

 

2,854

 

Cash and equivalents, end of period

 

$

2,467

 

 

$

6,582

 

2Adjusted 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.

 

 

Three months ended
June 30, 2022

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

Net Income (loss)

 

$

122

 

 

 

Depreciation, depletion, accretion and amortization

 

 

2,571

 

 

 

Unrealized loss (gain) on commodity derivatives

 

 

(699

)

 

 

Interest expense, net

 

 

60

 

 

 

Deferred income taxes

 

 

268

 

 

 

Non-cash stock based compensation

 

 

609

 

 

 

Transaction related expenses

 

 

306

 

 

 

Transaction related acquired realized derivative loss

 

 

1,715

 

 

 

Loss (gain) on marketable securities

 

 

121

 

 

 

Adjusted EBITDA

 

$

5,073

 

 

 


Corporate Contact:

U.S. Energy Corp.
Ryan Smith
Chief Executive Officer
(303) 993-3200
www.usnrg.com