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 oil and natural gas assets,
today reported financial and operating results for the three and
nine months ended September 30, 2022.
THIRD QUARTER 2022 RESULTS
- Net cash from operations of $4.7
million.
- Net income of $4.1 million, or
$0.16 per diluted share.
- Adjusted EBITDA, excluding
derivatives impact, of $3.1 million.
- Daily production of 1,752 barrels
of oil equivalent per day (“Boe/d”).
- Returned $0.6 million to
shareholders through quarterly cash dividend; $1.7 million returned
YTD 2022.
- Closed highly accretive acquisition
of East Texas operating oil and gas properties.
MANAGEMENT COMMENTARY
“During the third quarter, U.S. Energy continued
to build a strong platform for growth across a diverse portfolio of
mature, stable-return producing properties,” stated Ryan Smith,
Chief Executive Officer of U.S. Energy. “During the last two years,
we have invested approximately $85 million to acquire nearly $175
million proved oil and gas reserves, resulting in more than $6 per
share of combined PV-10 per share value. Looking ahead, we remain
disciplined acquirors of proven, long-lived reserves within some of
the most prolific U.S. basins, while continuing to drive strong
free cash flow conversion in support of our stated return of
capital priorities.”
“As expected, third quarter production levels
and lease operating expense were impacted by planned, one-time
maintenance costs associated with our recently acquired assets in
West Texas,” continued Smith. “These non-recurring maintenance
costs amounted to a one-time impact of approximately $1.3 million,
or $0.05 per diluted share in the third quarter. Looking ahead to
the fourth quarter, we anticipate sequential growth in production
volumes, Adjusted EBITDA and free cash flow generation, with no
planned maintenance in the period.”
“Entering 2023, our approach to capital
allocation continues to prioritize further investments in new,
producing properties, continue our quarterly cash dividend,
together with a focus on maintaining a conservative net leverage
profile,” noted Smith. Our team continues to demonstrate a proven
ability to source, acquire, integrate, and operate a valuable
portfolio of high-return assets, while providing shareholders an
exciting opportunity to participate in value creation,” concluded
Smith. “We are look forward to building on the momentum evident
across our business as we enter this next chapter of growth.”
STRATEGIC UPDATE
U.S. Energy operates a portfolio of mature,
producing assets that provide high margin free cash flow. That cash
is allocated to maintaining a stable quarterly cash dividend and
paying down the outstanding balance on the revolving credit
facility.
The Company aims to achieve greater scale
through the acquisition of high-quality, low-decline assets
providing a platform for sustained profitability. As cash flows
increase with new asset additions, the Company recognizes potential
to develop an even more robust return of capital program.
PRODUCTION UPDATE
For the three months ended September 30, 2022,
the Company produced 161,205 Boe, or an average of 1,752 Boe/d, as
compared to 162,230 Boe, or an average of 1,783 Boe/d, during the
prior quarter.
|
|
3Q 2022 |
|
2Q 2022 |
Sales Volume (Total) |
|
|
|
|
Oil (Bbls) |
|
95,429 |
|
107,845 |
Gas and liquids (Mcfe) |
|
394,660 |
|
326,308 |
Sales volumes (Boe) |
|
161,205 |
|
162,230 |
Average Daily Production (Boe/d) |
|
1,752 |
|
1,783 |
Average Sales Prices |
|
|
|
|
Oil (Bbl) |
|
$94.81 |
|
$105.74 |
Gas and liquids (Mcfe) |
|
$7.10 |
|
$6.55 |
Barrel of Oil Equivalent |
|
$73.36 |
|
$83.09 |
|
|
|
|
|
The Company benefits from a diversified
production base and has focused its acquisition and operating
efforts on the following asset districts. Net production from the
third quarter 2022 is as follows:
Rockies / North Dakota – 512 Boe/d (79% oil)
Mid-Continent / East Texas – 695 Boe/d (28%
oil)
West Texas / Gulf Coast – 545 Boe/d (80%
oil)
THIRD QUARTER 2022 FINANCIAL
RESULTS
U.S. Energy reported total oil and gas sales of
approximately $11.8 million for the third quarter 2022, compared to
$13.5 million in the second quarter 2022. The sequential decline in
revenue was primarily due to planned maintenance on newly acquired
wells in the West Texas district, which have been brought back
online during the fourth quarter 2022. Sales from oil production
represented 76% of total revenue during the quarter.
The Company recorded lease operating expense
(“LOE”) of approximately $5.4 million for the third quarter 2022,
compared to $4.6 million in the second quarter. LOE increased due
to one-time charges incurred to maximize the operating performance
of recently acquired wells in West Texas.
Severance and Ad Valorem taxes in the third
quarter were approximately $0.8 million, as compared to
approximately $0.9 million in the second quarter. On a percentage
basis, U.S. Energy paid approximately 6.9% of total oil and natural
gas sales revenue in taxes during the quarter.
Cash general and administrative expenses were
approximately $2.2 million as compared to approximately $2.0
million during the prior period. The increase is primarily due to
professional fees related to the registration of shares around the
Company’s January 2022 acquisition.
Based on a realized price of $73.36 per Boe, the
Company achieved an operating margin of $19.44 per Boe, or 27% for
the quarter, down from $32.98 per Boe, or 40%, from the prior
quarter, due in large part to non-recurring workover expense in
recently acquired assets that resulted in delayed production and
higher operating costs.
The Company reported net income of $4.1 million,
or $0.16 per diluted share, which includes a $5.6 million net
unrealized gain on the value of derivative contracts.
Adjusted EBITDA, excluding the impact of hedges,
was $3.1 million.
HEDGING PROGRAM UPDATE
The following table reflects the hedged volumes
under U.S. Energy’s commodity derivative contracts and the average
fixed, floor and ceiling prices at which production is hedged for
November 2022 through 2023, as of November 10, 2022:
|
|
Collars |
Period |
|
Commodity |
|
Volume (Bbls) |
|
Floor ($ / Bbl) |
|
Ceiling ($ / Bbl) |
Q4 2022 |
|
Crude Oil |
|
71,800 |
|
$59.86 |
|
$80.34 |
Q1 2023 |
|
Crude Oil |
|
66,200 |
|
$57.73 |
|
$76.00 |
Q2 2023 |
|
Crude Oil |
|
53,500 |
|
$60.00 |
|
$81.04 |
Q3 2023 |
|
Crude Oil |
|
52,600 |
|
$60.00 |
|
$81.04 |
Q4 2023 |
|
Crude Oil |
|
51,200 |
|
$60.00 |
|
$81.04 |
|
|
Swaps |
Period |
|
Commodity |
|
Volume(Bbls | MMBtu) |
|
Avg Price($/Bbl | $/MMBtu) |
Q4 2022 |
|
Crude Oil |
|
9,000 |
|
$49.99 |
Q4 2022 |
|
Natural Gas |
|
60,000 |
|
$2.955 |
Q1 2023 |
|
Crude Oil |
|
3,000 |
|
$54.57 |
Q1 2023 |
|
Natural Gas |
|
60,000 |
|
$2.955 |
Q2 2023 |
|
Crude Oil |
|
3,000 |
|
$54.57 |
|
|
|
|
|
|
|
EAST TEXAS ACQUISITION
On July 28, 2022, U.S. Energy closed on its
acquisition of operated oil and gas producing properties located in
Anderson and Henderson Counties, Texas, in an all-cash transaction
valued at $11.8 million funded with cash on hand and borrowings
under the Company’s senior secured revolving credit facility.
The bolt-on acquisition consists of low-decline
wells with proved reserves of approximately 1.3 million Boe and PDP
PV-10 of $22.7 million.
The acquisition is complementary to the
Company’s existing East Texas assets and fits well within the
corporate strategy of adding operating scale and cash flow in
existing operating areas at compelling valuations.
BALANCE SHEET UPDATE
As of September 30, 2022, the Company had debt
outstanding of $12.5 million on its revolving credit facility with
availability of $7.5 million and a cash balance of approximately
$3.1 million. The credit facility matures in 2026 and had a
weighted average interest rate of 6.25% for the third quarter
2022.
RETURN OF CAPITAL PROGRAM
Consistent with the Company’s long-term return
of capital strategy, the Company’s board of directors has declared
a $0.0225 per share dividend for shareholders of record as of
November 8, 2022. The dividend will be paid by U.S. Energy on
November 22, 2022.
CONFERENCE CALL AND WEBCAST
U.S. Energy will host an investor conference
call tomorrow at 8:30 a.m. Eastern Time to discuss these operating
and financial results. Interested parties may join the call by
dialing 1-877-407-3982 (U.S.), or 1-201-493-6780 (international),
at least 15 minutes before the call begins and providing the
Conference ID: 13733436. A telephonic replay will be available for
fourteen days following the call by dialing 1-844-512-2921 (U.S.)
or 1-412-317-6671 (international)and providing the replay PIN
number: 13733436.
A webcast of the conference call will be
available in the Investor Relations section of the Company’s
website at www.usnrg.com. The listen to the live broadcast, go to
the site at least 15 minutes prior to the scheduled start time in
order to register, download and install any necessary audio
software.
ABOUT U.S. ENERGY
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 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; 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. 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 STATEMENT PRESENTATION AND
RECONCILIATION
U.S. ENERGY CORP. AND SUBSIDIARIESUNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except
share and per share amounts) |
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and equivalents |
|
$ |
3,093 |
|
|
$ |
4,422 |
|
Oil and natural gas sales receivable |
|
|
4,520 |
|
|
|
933 |
|
Marketable equity securities |
|
|
106 |
|
|
|
191 |
|
Prepaid and other current assets |
|
|
378 |
|
|
|
179 |
|
Real estate assets held for sale, net of selling costs |
|
|
175 |
|
|
|
250 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
8,272 |
|
|
|
5,975 |
|
|
|
|
|
|
|
|
|
|
Oil and natural gas
properties under full cost method: |
|
|
|
|
|
|
|
|
Unevaluated properties |
|
|
1,584 |
|
|
|
1,588 |
|
Evaluated properties |
|
|
201,572 |
|
|
|
95,088 |
|
Less accumulated depreciation, depletion, amortization and
impairment |
|
|
(94,376 |
) |
|
|
(88,195 |
) |
|
|
|
|
|
|
|
|
|
Net oil and natural gas properties |
|
|
108,780 |
|
|
|
8,481 |
|
|
|
|
|
|
|
|
|
|
Pending acquisition |
|
|
- |
|
|
|
2,767 |
|
Property and equipment,
net |
|
|
634 |
|
|
|
188 |
|
Right-of-use asset |
|
|
933 |
|
|
|
120 |
|
Other assets |
|
|
375 |
|
|
|
132 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
118,994 |
|
|
$ |
17,663 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
8,196 |
|
|
$ |
1,447 |
|
Accrued compensation and benefits |
|
|
683 |
|
|
|
1,162 |
|
Commodity derivative liability-current |
|
|
1,991 |
|
|
|
- |
|
Asset retirement obligations-current |
|
|
1,965 |
|
|
|
- |
|
Premium finance note |
|
|
216 |
|
|
|
- |
|
Warrant liability |
|
|
- |
|
|
|
19 |
|
Current lease obligation |
|
|
182 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
13,233 |
|
|
|
2,742 |
|
|
|
|
|
|
|
|
|
|
Credit facility |
|
|
12,500 |
|
|
|
- |
|
Commodity derivative
liability-noncurrent |
|
|
6 |
|
|
|
- |
|
Asset retirement
obligations-noncurrent |
|
|
12,091 |
|
|
|
1,461 |
|
Lease
obligation-noncurrent |
|
|
837 |
|
|
|
19 |
|
Other noncurrent
liabilities |
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
38,673 |
|
|
|
4,228 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; unlimited shares authorized;
25,023,812 and 4,676,301 shares issued and outstanding at September
30, 2022 and December 31, 2021, respectively |
|
|
250 |
|
|
|
47 |
|
Additional paid-in capital |
|
|
216,267 |
|
|
|
149,276 |
|
Accumulated deficit |
|
|
(136,196 |
) |
|
|
(135,888 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
80,321 |
|
|
|
13,435 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
118,994 |
|
|
$ |
17,663 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONSFOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2022 AND 2021(In thousands, except
share and per share amounts) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
8,979 |
|
|
$ |
1,593 |
|
|
$ |
28,146 |
|
|
$ |
4,232 |
|
Natural gas and liquids |
|
|
2,820 |
|
|
|
191 |
|
|
|
6,005 |
|
|
|
419 |
|
Gathering fee |
|
|
27 |
|
|
|
- |
|
|
|
27 |
|
|
|
- |
|
Total revenue |
|
|
11,826 |
|
|
|
1,784 |
|
|
|
34,178 |
|
|
|
4,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
|
5,350 |
|
|
|
586 |
|
|
|
12,732 |
|
|
|
1,631 |
|
Production taxes |
|
|
817 |
|
|
|
133 |
|
|
|
2,302 |
|
|
|
343 |
|
Depreciation, depletion, accretion and amortization |
|
|
2,528 |
|
|
|
151 |
|
|
|
6,985 |
|
|
|
415 |
|
General and administrative expenses |
|
|
2,708 |
|
|
|
686 |
|
|
|
8,296 |
|
|
|
2,233 |
|
Total operating expenses |
|
|
11,403 |
|
|
|
1,556 |
|
|
|
30,315 |
|
|
|
4,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
|
423 |
|
|
|
228 |
|
|
|
3,863 |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity derivative gain (loss) |
|
|
4,025 |
|
|
|
(25 |
) |
|
|
(4,944 |
) |
|
|
(235 |
) |
Marketable equity securities (loss) gain |
|
|
(45 |
) |
|
|
(6 |
) |
|
|
(85 |
) |
|
|
67 |
|
Impairment on real estate held for sale |
|
|
(75 |
) |
|
|
(141 |
) |
|
|
(75 |
) |
|
|
(141 |
) |
Other (expense) income, net |
|
|
(2 |
) |
|
|
24 |
|
|
|
(8 |
) |
|
|
49 |
|
Interest, net |
|
|
(187 |
) |
|
|
1 |
|
|
|
(295 |
) |
|
|
(57 |
) |
Total other non-operating income (expense) |
|
|
3,716 |
|
|
|
(147 |
) |
|
|
(5,407 |
) |
|
|
(317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before
income taxes |
|
$ |
4,139 |
|
|
$ |
81 |
|
|
$ |
(1,544 |
) |
|
$ |
(288 |
) |
Income tax (expense)
benefit |
|
|
(29 |
) |
|
|
|
|
|
|
2,392 |
|
|
|
|
|
Net income
(loss) |
|
$ |
4,110 |
|
|
$ |
81 |
|
|
$ |
848 |
|
|
$ |
(288 |
) |
Basic weighted shares
outstanding |
|
|
24,390,193 |
|
|
|
4,676,301 |
|
|
|
24,548,385 |
|
|
|
4,429,870 |
|
Diluted weighted shares
outstanding |
|
|
24,682,476 |
|
|
|
4,721,301 |
|
|
|
24,891,148 |
|
|
|
4,429,870 |
|
Basic earnings (loss) per
share |
|
$ |
0.16 |
|
|
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
(0.07 |
) |
Diluted earnings (loss) per
share |
|
$ |
0.16 |
|
|
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
(0.07 |
) |
U.S. ENERGY CORP. AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWSFOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2022 AND 2021(in
thousands) |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
848 |
|
|
$ |
(288 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion, accretion, and amortization |
|
|
6,985 |
|
|
|
415 |
|
Deferred income taxes |
|
|
(2,460 |
) |
|
|
- |
|
Unrealized (gain) loss on commodity derivatives |
|
|
(1,155 |
) |
|
|
116 |
|
Loss (gain) on marketable equity securities |
|
|
85 |
|
|
|
(67 |
) |
Impairment and loss on real estate held for sale |
|
|
75 |
|
|
|
141 |
|
Amortization of debt issuance costs |
|
|
32 |
|
|
|
- |
|
Loss on warrant revaluation |
|
|
- |
|
|
|
(2 |
) |
Loss on related party debt conversion and settlement of legal
costs |
|
|
- |
|
|
|
76 |
|
Stock-based compensation |
|
|
2,594 |
|
|
|
310 |
|
Right of use asset amortization |
|
|
140 |
|
|
|
66 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Oil and natural gas sales receivable |
|
|
(3,587 |
) |
|
|
(570 |
) |
Other assets |
|
|
320 |
|
|
|
130 |
|
Accounts payable and accrued liabilities |
|
|
5,456 |
|
|
|
(215 |
) |
Accrued compensation and benefits |
|
|
(479 |
) |
|
|
(43 |
) |
Payments on operating lease liability |
|
|
(68 |
) |
|
|
(66 |
) |
Payments for asset retirement obligations |
|
|
(289 |
) |
|
|
(22 |
) |
Net cash provided by
(used in) operating activities |
|
|
8,497 |
|
|
|
(19 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of proved properties |
|
|
(12,610 |
) |
|
|
- |
|
Oil and natural gas capital expenditures |
|
|
(5,369 |
) |
|
|
(1,399 |
) |
Property and equipment expenditures |
|
|
(379 |
) |
|
|
(93 |
) |
Proceeds from sale of oil and gas properties |
|
|
1,250 |
|
|
|
30 |
|
Proceeds from sale of real estate |
|
|
- |
|
|
|
440 |
|
Payment received on note receivable |
|
|
- |
|
|
|
20 |
|
Net cash used in
investing activities |
|
|
(17,108 |
) |
|
|
(1,002 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock, net of issuance costs |
|
|
- |
|
|
|
5,283 |
|
Borrowings on credit facility |
|
|
15,200 |
|
|
|
|
|
Repayment of debt |
|
|
(6,047 |
) |
|
|
|
|
Payment of fees for credit facility |
|
|
(207 |
) |
|
|
|
|
Repayments of insurance premium finance note payable |
|
|
(396 |
) |
|
|
(122 |
) |
Exercise of warrant |
|
|
195 |
|
|
|
|
|
Shares withheld to settle tax withholding obligations for
restricted stock awards |
|
|
(307 |
) |
|
|
(39 |
) |
Dividend paid |
|
|
(1,156 |
) |
|
|
|
|
Net cash provided by
financing activities |
|
|
7,282 |
|
|
|
5,122 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in
cash and equivalents |
|
|
(1,329 |
) |
|
|
4,101 |
|
Cash and equivalents,
beginning of period |
|
|
4,422 |
|
|
|
2,854 |
|
Cash and equivalents,
end of period |
|
$ |
3,093 |
|
|
$ |
6,955 |
|
|
|
|
|
|
|
|
|
|
ADJUSTED 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 monthsendedSeptember
30,2022 |
|
(in thousands) |
Net Income (loss) |
$ |
4,110 |
Depreciation, depletion, accretion and amortization |
|
2,528 |
Unrealized loss (gain) on commodity derivatives |
|
(5,636) |
Interest expense, net |
|
187 |
Deferred income taxes |
|
29 |
Non-cash stock based compensation |
|
485 |
Transaction related expenses |
|
- |
Transaction related acquired realized derivative loss |
|
1,371 |
Loss (gain) on marketable securities |
|
45 |
Adjusted EBITDA |
$ |
3,119 |
|
|
|
INVESTOR RELATIONS CONTACT
U.S. Energy Corp.IR@usnrg.com(303)
993-3200www.usnrg.com
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