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U.S. Energy Corp. Reports 2012 Highlights And Selected Financial Results

Stocks in this article: USEG

Announces the Initial Production Rates From Two Bakken and Two Three Forks Formation Wells

Provides an Operational Update

RIVERTON, Wyo., March 18, 2013 (GLOBE NEWSWIRE) -- U.S. Energy Corp. (Nasdaq:USEG) ("USE" or the "Company"), today reported 2012 highlights and selected financial results for the year ended December 31, 2012 and the period subsequent to year end, announced the initial production rates from four wells in the Williston Basin of North Dakota, and provided an operational update.

Selected Highlights for 2012 and Period Subsequent to December 31, 2012

Financial and Operational Results

  • Produced 444,702 BOE, or 1,215 BOE/D during the year from 83 gross (15.05 net) producing wells at December 31, 2012.
  • Recognized a company record $32.5 million in oil and gas revenue during 2012, compared to revenues of $31.0 million during 2011. The $1.5 million increase in revenue is primarily due to higher oil sales volumes in 2012 when compared to 2011.
  • At December 31, 2012, we had $2.8 million in cash and cash equivalents. Our working capital (current assets minus current liabilities) was $12.8 million.
  • During the year ended December 31, 2012, we received an average of $2.7 million per month from our producing wells with an average operating cost of $462,000 per month (excluding workover costs) and production taxes of $291,000, for average cash flows of $2.0 million per month from oil and gas production before non-cash depletion expense.
  • Excluding the $5.2 million non-cash impairment taken on our oil and gas properties during the period, oil and gas operations produced operating income of $6.9 million during the year ended December 31, 2012 as compared to operating income of $5.4 million during the year ended December 31, 2011. The increase is primarily due to (a) a $4.4 million increase in oil revenues during 2012 compared to 2011 and (b) $1.1 million lower lease operating expenses in the year ending December 31, 2012 as compared to the prior year. This increase was partially offset by $896,000 higher depletion expense in 2012 and a $2.8 million decrease in natural gas and natural gas liquids revenues primarily due to production declines from our wells in the Gulf Coast.
  • At year-end 2012, the Company had estimated proved reserves of 2,913,324 BOE (90% oil and 10% natural gas), with a standardized measure value of $70.1 million and a PV10 of $76.5 million.
  • On April 10, 2012, the borrowing base under the Wells Fargo Senior Credit Facility was redetermined and was increased from $28 million to $30 million and the commitment amount increased from $75 million to $100 million. At December 31, 2012 we had $10 million outstanding under the facility to fund our drilling programs.
  • During the year ended December 31, 2012, we recorded a net loss after taxes of $11.2 million as compared to a net loss after taxes of $4.8 million during the same period of 2011. 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 stock compensation expense ("EBITDAX"), which is a non-GAAP performance measure was $13.2 million for the year ended December 31, 2012, an increase of 33.2% from $9.9 million for the same period of 2011. Please refer to the respective reconciliations in this release for additional information about this measure.

Mount Emmons Molybdenum Project

On October 10, 2012, the Company submitted a Mine Plan of Operations ("MPO") to the U.S. Forest Service. At this time, we are continuing work with the U.S. Forest Service in their completeness review of the MPO. Upon receiving a completeness determination, we expect to enter the National Environmental Protection Act ("NEPA") review and permitting process.

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