Oil and gas properties
Firstly, U.S. Energy Corp. announced that the Company has completed its previously announced acquisition of operated oil and gas producing properties. In addition, the lands are located in Anderson and Henderson Counties, TX.
Moreover, the agreement is for a total cash consideration of $11.875 million, less purchase price adjustments.
The successful closing of this highly accretive acquisition continues to build U.S. Energy’s production base, realizable upside inventory, and free cash flow profile. This acquisition further diversifies our commodity mix and when combined with our existing balanced portfolio, allows us the optionality to allocate capital to the Company’s highest rate of return projects. As we move into the second half of 2022, we remain focused on disciplined capital allocation across our asset base, the preservation of our strong balance sheet, and maintaining our shareholder returns program through internally generated free cash flow.
Ryan Smith, U.S. Energy’s Chief Executive Officer.
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Acquisition Highlights
- Bolt-on acquisition of low-decline, core focus properties in East Texas for $11.8 million from a private party.
- Estimated $22.7 million Proved Developed Producing PV-10 (“PV-10”) as of June 1, 2022 with estimated reserves of approximately 1.3 million barrels of oil equivalent (“MMBOE”).1,2
- April 2022 net production averaged 418 barrels of oil equivalent per day (“Boepd”) (40% oil, 60% natural gas).
- Forward 1-year unhedged free cash flow expected to represent an initial purchase price transaction multiple of 1.7x.3
- Approximately 16,600 net acres.
- Includes two pipeline gathering systems and related infrastructure.
- All cash purchase price consideration is expected to drive immediate accretion across all relevant metrics while maintaining the Company’s low leverage balance sheet.
About U.S. Energy Corp.
It is a 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.
Additionally, U.S. Energy Corp. is an independent energy company focused on the acquisition and development of oil and gas producing properties primarily in the North Dakota and South Texas.
Also, the organization target low decline assets with existing infrastructure; that allows it to maximize its return on capital; enabling the Company to efficiently increase shareholder value in a cost effective and sustainable manner.
Finally, the organization is 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 .
