Exploration & Production | Drilling / Well Results

U.S. Energy Touts 'Broader Understanding' of Buda Play; Details Bakken Results

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U.S. Energy Corp. has provided an operational update on its South Texas and North Dakota operations.

South Texas - Buda Limestone formation

Keith Larsen, CEO of U.S. Energy Corp., commented: "Having participated in six Buda wells with Contango and two with U.S. Enercorp., we are now beginning to gain a broader understanding of the extent of the play as well as the production response rates. Looking forward, we remain optimistic about the overall potential of the Booth-Tortuga and Big Wells prospects yet we still have much more drilling to do to fully understand the extent of the natural fractures in the region. Additionally, we believe that the potential exists to enhance the production profiles of our wells through down hole stimulation as warranted. Contango is considering such work on both the Beeler #7 and #8 at this time. If successful, it could lead to additional wells being stimulated through a variety of means. Further, the potential for down spacing in the region will also be considered as our exploration program advances."

Booth-Tortuga Prospect (30% working interest / ~22.5% net revenue interest)

The Company participates with Contango Oil & Gas Company in approximately 12,457 gross (3,740 net) acres in the Booth-Tortuga acreage block in Zavala and Dimmit Counties, Texas which are prospective for the Buda Limestone and other formations.

On December 26, 2013, Contango spud the Beeler #7H well, targeting the Buda formation. The well was drilled to a total measured depth of 12,066 feet, including a 4,866 foot lateral. The well was completed open hole without fracture stimulation and commenced production in late January 2014. The well had a peak early 24-hour flow back rate of 440 gross BOE/D (~90% oil) and a 30 day average production rate of 187 gross BOE/D (~78% oil).

On February 6, 2014, Contango spud the Beeler #8H well, targeting the Buda formation. The well was drilled to a total measured depth of 11,735 feet, including a 3,901 foot lateral. The well was completed open hole without fracture stimulation and commenced production in mid-February 2014. The well had a peak early 24-hour flow back rate of 886 gross BOE/D (~91% oil) and a 30 day average production rate of 347 gross BOE/D (~71% oil).

On February 10, 2014, Contango spud the Beeler #6H well, targeting the Buda formation. The well was drilled to a total measured depth of 10,615 feet, including a 3,337 foot lateral. The well was completed open hole without fracture stimulation and commenced production in early March 2014. The well had a peak early 24-hour flow back rate of 1,185 gross BOE/D (~91% oil).

The Beeler 5H ST well and the Beeler Unit A 9H well, both targeting the Buda formation, were spud on March 25, 2014 and March 26, 2014, respectively. Both wells are currently drilling towards their targeted depths.

Big Wells Prospect

The Company participates with U.S. Enercorp in approximately 4,243 gross (636 net) acres in the Big Wells acreage block in Dimmit County, Texas which is prospective for the Buda Limestone and other formations. The Company has an approximate 15% working interest and an approximate 11.25% net revenue interest in the acreage. The leasehold is contiguous to the southwestern portion of the Booth-Tortuga acreage block held with Contango Oil and Gas.

On February 3, 2014, U.S. Enercorp spud the Willerson #2H well, targeting the Buda formation. The well was drilled to a total measured depth of 12,616 feet, including a 5,416 foot lateral. The well was completed open hole without fracture stimulation and commenced production the first week of March 2014. The well had a peak early 24-hour flow back rate of 634 gross BOE/D (~72% oil).

Booth-Tortuga and Big Wells Buda Limestone formation wells status table:

Williston Basin, North Dakota

The Company participates in drilling programs with numerous operators in the Williston Basin of North Dakota. We participate in approximately 84,480 gross (3,225 net) acres in Williams, McKenzie and Mountrail Counties, North Dakota. At December 31, 2013, the Company had participation in 101 gross (10.7 net) Bakken and Three Forks formation producing wells. Due primarily to seasonal weather related issues in North Dakota, our Williston Basin production decreased by approximately 24% during the first two months of 2014 to an average of approximately 625 BOE/D as compared to 817 BOE/D in the fourth quarter of 2013.

The following table summarizes current activity under our North Dakota drilling programs.

Williston Basin Wells in Progress: