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U.S. Energy Corp. (NASDAQ:USEG), today reported its third quarter 2015 highlights and selected financial results for the three and nine months ended September 30, 2015.
Selected Highlights for the Three Months Ended September 30, 2015
– Third quarter 2015 production came from a total of 149 gross (20.88 net) wells. During the quarter the Company produced 80,673 barrels of oil equivalent (“BOE”), or an average of 877 BOE per day (“BOE/D”) as compared to 142,484 BOE or an average of 1,549 BOE/D during the three months ended September 30, 2014. Sequentially from the second quarter of 2015, production during the third quarter decreased approximately 2.2% as a result of normal production declines and fewer wells being drilled due to low commodity prices.
– During the third quarter 2015, we recorded a net loss after taxes of $23.7 million or $0.84 per share basic and diluted, as compared to a net loss after taxes of $63,000, or $0.00 per share basic and diluted, during the same period of 2014. During the three months ended September 30, 2015, the Company recorded a proved property impairment of $21.4 million related to its oil and gas assets, which represents $0.76 of the $0.84 per share loss. The impairment was primarily due to a decline in the price of oil. There were no proved property impairments recorded during the three months ended September 30, 2014.
– At September 30, 2015, we had $3.9 million in cash and cash equivalents.
– The Company recognized $2.6 million in revenues during the three months ended September 30, 2015 as compared to $9.9 million in revenues during the third quarter of 2015. The $7.3 million decrease in revenue is primarily due to lower oil and gas sales volumes in the third quarter of 2015 when compared to the third quarter of 2014.
– General and administrative expenses decreased by $206,000 during the three months ended September 30, 2015 as compared to general and administrative expenses for the same period of 2014.
– Adjusted Net Income (Loss), a non-GAAP measure that excludes non-recurring items and mark-to-market gains and losses on derivative instruments, was an Adjusted Net Loss of $3.5 million during the three months ended September 30, 2015, or $0.13 per basic and diluted share. Adjusted Net Loss was $774,000 for the three months ended September 30, 2014, or $0.03 per basic and diluted share. Please refer to the reconciliation in this release for additional information about this measure.
– 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 a $1.4 million loss for the three months ended September 30, 2015, compared to a $4.6 million gain for the three months ended September 30, 2014. Modified EBITDAX is a non-GAAP financial measure. Please refer to the reconciliation in this release for additional information about this measure.
Selected Highlights for the Nine Months Ended September 30, 2015
– During the nine months ended September 30, 2015 the Company produced 248,518 barrels of oil equivalent (“BOE”), or an average of 910 BOE per day (“BOE/D”) as compared to 364,076 BOE or an average of 1,334 BOE/D during the nine months ended September 30, 2014. The decrease in production is a result of normal production declines and fewer wells being drilled during the period due to low commodity prices.
– During the nine months ended September 30, 2015 we received an average of $954,000 per month from our producing wells with an average operating cost of $515,000 per month (including workover costs) and production taxes of $89,000, for average net cash flows of $350,000 per month from oil and gas production before non-cash depletion expense and impairments.
– During the nine months ended September 30, 2015, we recorded a net loss after taxes of $53.6 million or $1.91 per share basic and diluted, as compared to net income after taxes of $243,000, or $0.01 per share basic and diluted, during the same period of 2014. During the nine months ended September 30, 2015, the Company recorded proved property impairments totaling $43.9 million related to its oil and gas assets, which represents $1.56 of the $1.91 per share loss. The impairment was primarily due to a decline in the price of oil. There were no proved property impairments recorded during the first nine months of 2014.
– The Company recognized $8.6 million in revenues during the nine months ended September 30, 2015 as compared to $27.3 million in revenues during the same period in 2014. The $18.7 million decrease in revenue is primarily due to lower oil and gas prices and lower oil and gas sales volumes in the first nine months of 2015 as compared to the first nine months of 2014.
– General and administrative expenses decreased by $645,000 during the nine months ended September 30, 2015 compared to general and administrative expenses for the nine months ended September 30, 2014.
– Adjusted Net Income (Loss), a non-GAAP measure that excludes non-recurring items and mark-to-market gains and losses on derivative instruments, was an Adjusted Net Loss of $10.6 million during the nine months ended September 30, 2015, or $0.38 per basic and diluted share. Adjusted Net Income was $160,000 for the nine months ended September 30, 2014, or $0.01 per basic and diluted share. Please refer to the reconciliation in this release for additional information about this measure.
– 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 (“Modified EBITDAX”), was a $3.0 million loss for the nine months ended September 30, 2015, compared to a $12.9 million gain for the nine months ended September 30, 2014. Modified EBITDAX is a non-GAAP financial measure. Please refer to the reconciliation in this release for additional information about this measure.
Revolving Credit Facility
– Our Credit Agreement with Wells Fargo Bank, N.A. provides a $100.0 million senior secured credit facility. Effective July, 16, 2015 we have a redetermined borrowing base of $7.0 million with a maturity date of July 30, 2017. At September 30, 2015, we had $6.0 million drawn on the facility.
