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U.S. Energy's Eagle Ford, Bakken Ops Lift Production 40% YOY

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   |    Monday,November 10,2014

U.S. Energy Corp. reported its third quarter 2014 highlights and selected financial results for the quarter ended September 30, 2014 and provided an operations update.

Operations Update

As of September 30, 2014 the Company has participation interests in 130 gross (19.63 net) producing wells primarily located in South Texas and the Williston Basin of North Dakota.

Detailed updates on U.S. Energy's South Texas and Williston Basin operations can be accessed below.

U.S. Energy's South Texas Production Skyrockets 332%

U.S. Energy Awaiting Several Bakken Well Completions

Third Quarter Highlights:

  • Produced a quarterly Company record 142,484 barrels of oil equivalent or 1,549 barrels of oil equivalent per day, an increase of 22% compared to the second quarter of 2014 and a 40% increase when compared to the third quarter of 2013.
  • The Company recorded a net loss after taxes during the quarter of $63,000, or $0.00 per share basic and diluted, as compared to a net loss after taxes of $834,000, or $0.03 per share basic and diluted, during the same period of 2013.
  • Adjusted Net Loss, a non-GAAP measure that excludes non-recurring items and mark-to-market gains and losses on derivative instruments, was $136,000 during the three months ended September 30, 2014, or $0.00 per basic and diluted share. Adjusted Net Loss was $66,000 for the third quarter of 2013, or $0.00 per basic and diluted share. Please refer to the reconciliation in this release for additional information about this measure.
  • Oil and gas operations generated operating income of $2.3 million during the quarter ended September 30, 2014 as compared to operating income of $2.5 million during the quarter ended September 30, 2013.
  • The Company recognized $9.9 million in revenues during the three months ended September 30, 2014 as compared to $8.6 million during the same period of the prior year. The $1.3 million increase in revenue is primarily due to higher oil and gas sales volumes in the third quarter of 2014 when compared to the same period in 2013.
  • At September 30, 2014, we had $4.4 million in cash and cash equivalents. Our working capital (current assets minus current liabilities) was $5.7 million.
  • Earnings before interest, income taxes, depreciation, depletion and amortization, accretion of discount on asset retirement obligations, non-cash impairments, unrealized derivative gains and losses and non-cash compensation expense, was $4.6 million for the three months ended September 30, 2014, an increase of 33% compared to a Modified EBITDAX of $3.5 million for the three months ended September 30, 2013. Modified EBITDAX is a non-GAAP financial measure. Please refer to the reconciliation in this release for additional information about this measure.

Nine Month Highlights:

  • Produced a Company record 364,076 BOE, or an average of 1,334 BOE/D for the nine months ended September 30, 2014. This production represents an increase of 21% compared to the same period in 2013.
  • The Company recorded net income after taxes of $243,000, or $0.01 per share basic and diluted, as compared to a net loss after taxes of $6.2 million, or $0.22 per share basic and diluted, during the same period in 2013.
  • Adjusted Net Income was $581,000 during the nine months ended September 30, 2014, or $0.02 per basic and diluted share. Adjusted Net Income was $725,000 for the nine months ending September 30, 2013, or $0.03 per basic and diluted share.
  • Oil and gas operations generated operating income of $8.2 million during the nine months ended September 30, 2014 compared to operating income of $6.3 million during the nine months ended September 30, 2013, excluding the $5.8 million non-cash impairment charge taken on our oil and gas properties during the nine months ended September 30, 2013.
  • The Company recognized $27.3 million in revenues during the nine months ended September 30, 2014 as compared to $24.4 million during the same period in 2013. The $2.9 million increase in revenue is primarily due to higher oil and gas sales volumes in the first nine months of 2014 as compared to the first nine months of 2013.
  • We received an average of $3.0 million per month from our producing wells during the first nine months of 2014 with an average operating cost of $588,000 per month (including work over costs) and production taxes of $255,000, for average net cash flows of $2.2 million per month from oil and gas production before non-cash depletion expense.
  • Modified EBITDAX was $12.9 million for the nine months ended September 30, 2014, an increase of 12% compared to a Modified EBITDAX of $11.6 million for the nine months ended September 30, 2013.

2014 Capital Budget

Under our $30.2 million capital expenditures budget for 2014, we have spent approximately $22.3 million to fund our 2014 oil and gas drilling programs through September 30, 2014. The remaining $7.9 million is currently budgeted to be spent on exploration, development and acquisition initiatives in South Texas and in the Williston Basin of North Dakota.*

Financial Highlights