HIGHLIGHTS
- Closed Wavetech Agreement on
June 26, 2024 . The WT Asset includes:- Approximately 140,000 net acres.
- Multiple prospective helium pay zones consisting primarily of inert nitrogen and carbon dioxide heavy zones.
- Executed Synergy LOI on
June 25, 2024 . The SOG Asset includes:- Approximately 24,000 net acres, highly contiguous to Wavetech acreage.
- Multiple prospective helium pay zones, initially targeting carbon dioxide heavy zones.
- Planned and permitted two upcoming drilling locations on WT Asset.
- Wells expected to be spud in late July and early
August 2024 .
- Wells expected to be spud in late July and early
- Industry leading low environmental footprint through the production of non-hydrocarbon helium.
- Initiation of carbon sequestration business significantly expands opportunity.
- Company development plans are highly aligned with local, state, and federal legislation.
- Transactions are structured to minimize existing dilution while maintaining current attractive leverage profile.
- The Company does not anticipate raising outside capital to execute on this asset move, with cash on hand, cash flow, and anticipated proceeds from non-core asset sales expected to fund considerations and near-term development.
- Upcoming investor call to further discuss the transactions is scheduled for
Wednesday, July 10, 2024 at10:00 a.m. ET /9:00 a.m. CT , details below.
MANAGEMENT COMMENTARY
“With
“Across the vast asset base that
“In closing, we are delighted to work with our new partners moving forward, the state of
OVERVIEW OF ASSETS
The collective Assets comprise control of approximately 164,000 net acres across the Kevin Dome, a significant geological structure which has historically been a robust area for resource extraction. The Assets are highly contiguous and complimentary, and the area has seen recent successes with wells drilled for helium in multiple formations primarily consisting of inert nitrogen and carbon dioxide. The vast majority of the Assets are located on fee acreage, with a non-material amount on federal lands. We expect to go into further geologic and technical detail on our upcoming investor call.
Acreage Summary |
![]() |
Asset | |||
![]() | Wavetech: | 140,000* | |
![]() | Synergy: | 24,000** |
* Acquired
** Subject to letter of intent.
Wavetech Asset:
The WT Asset covers 140,000 net acres spanning the majority of the economically targeted positions across the Kevin Dome. While the initial primary targeted helium pay zone beneath the acreage will be the Flathead Sandstone, which we believe contains nitrogen dominated gas systems with recent data points of highly economic helium concentrations, we are optimistic about the testing of further helium pay zones across the Asset. Results from the two wells being drilled in late July and early
Synergy Asset:
The SOG Asset, covering 24,000 net acres, is positioned atop the center of the Kevin Dome structure. The initially targeted helium pay zone beneath the acreage is the Duperow, which contains carbon dioxide dominated gas systems with recent data points of highly economic helium concentrations. Additionally,
Synergy is controlled by Mr.
TRANSACTION CONSIDERATION DETAILS
Wavetech Consideration:
Under the terms of the Agreement, Wavetech will assign to
$2 .0mm in cash.- 2,600,000 shares of
U.S. Energy restricted common stock. $20 .0mm carried working interest for whichU.S. Energy commits to pay Wavetech’s exploration, drilling, and completion costs attributable to Wavetech’s 17.5% retained working interest.
Synergy Consideration:
Under the terms of the LOI, SOG will assign to
$2 .0mm in cash.- 4,845,900 shares of
U.S. Energy restricted common stock. - Warrants to purchase 6,250,000 shares of USEG common stock (at
$0.01 per share), contingent on achieving future helium sales. $12 .5mm carried working interest for whichU.S. Energy commits to pay Synergy’s exploration, drilling, and completion costs attributable to Synergy’s 12.5% retained working interest.- 18.0% of future amounts realized by
U.S. Energy in connection with tax credits obtained for carbon sequestration. - An Area of Mutual Interest (the “SOG AMI”) under which Synergy will have the right to participate for its proportionate interest of 12.5% in any new leases.
UPCOMING DRILLING AND DEVELOPMENT CATALYSTS
ADVISORS
UPCOMING INVESTOR CALL
A conference call will be held
A webcast of the conference call will be available in the Investor Relations section of the Company’s website at www.usnrg.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register, download, and install any necessary audio software.
To participate in the live teleconference:
Domestic Live: | 877-407-3982 |
International Live: | 201-493-6780 |
Call me link: | Call me active link. |
Webcast Participant Link: | Webcast active link. |
To listen to a replay of the teleconference, which subsequently will be available through
Domestic Replay: | 844-512-2921 |
International Replay: | 412-317-6671 |
Conference ID: | 13747559 |
ABOUT
We are a growth company focused on consolidating high-quality assets in
INVESTOR RELATIONS CONTACT
Mason McGuire
IR@usnrg.com
(303) 993-3200
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
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
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a647fa18-0229-43ce-91e5-6fdb9c705249
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Montana Acreage Position
![](https://ml.globenewswire.com/media/a647fa18-0229-43ce-91e5-6fdb9c705249/medium/montana-acreage-position.png)
Montana Acreage Position
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