U.S. Energy Corp. (USEG, Financial) filed Quarterly Report for the period ended 2010-03-31.
U.s. Energy Corp. has a market cap of $135.14 million; its shares were traded at around $5.1 with and P/S ratio of 14.04. USEG is in the portfolios of Jeremy Grantham of GMO LLC, Jim Simons of Renaissance Technologies LLC.
At March 31, 2010, the Company had twelve producing wells. During the first quarter of 2010, the Company received on average $2.3 million per month from these producing wells with average operating cost of $82,000 per month, before non cash depletion expense, for average cash flows of $2.2 million per month from oil and gas production. The Company anticipates that cash flows from oil and gas operations will increase through the balance of 2010 as the remaining wells being drilled with Brigham Oil & Gas, L.P. (“Brigham”) a Delaware limited partnership wholly-owned by Brigham Exploration Company (a Delaware corporation), begin to produce. Decreases in the price of oil and natural gas and declines in production rates however could decrease these monthly cash flow amounts.
At March 31, 2010, the Company had $19.3 million in cash and cash equivalents and $25.5 million in U.S. Treasuries. The Company has invested its cash in interest bearing accounts, with the majority invested in U.S. Government Treasuries. During the past two years, this investment policy has insured the preservation of principal and yielded a return.
The Company had an investment of $3.0 million in a geothermal company, Standard Steam Trust, LLC, (“SST”) as of December 31, 2009 representing an ownership interest of 23.8%. This investment was increased by an equity gain of $963,000 in the first quarter of 2010, leaving a net investment at March 31, 2010 of $3.9 million. As a result of not funding a cash call in the first quarter of 2010, the Company s ownership interest of SST was reduced from 23.8% to 22.8%. SST plans on continuing its temperature gradient drilling and the acquisition of additional prospective geothermal properties during 2010. The Company has not budgeted any capital resources for further investment in SST during 2010 but may elect to participate in cash calls during the year. The Company is not obligated to fund cash calls and will suffer further dilution if it elects not to fund.
The Company recorded net income after taxes of $1.5 million, or $0.06 per share basic and $0.05 diluted, for the quarter ended March 31, 2010 as compared to a net loss after taxes of $2.3 million, or $0.11 per share basic and diluted, during the quarter ended March 31, 2009.
Oil and gas operations produced net operating income of $4.3 million during the quarter ended March 31, 2010 as compared to a loss of $1.2 million from oil and gas operations during the quarter ended March 31, 2009. The following table details the results of operations from the oil and gas sector for the quarters ended March 31, 2010 and 2009:
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U.s. Energy Corp. has a market cap of $135.14 million; its shares were traded at around $5.1 with and P/S ratio of 14.04. USEG is in the portfolios of Jeremy Grantham of GMO LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
At March 31, 2010, the Company had $19.3 million in cash and cash equivalents and $25.5 million in U.S. Treasuries with longer than 90-day maturities from date of purchase for a total of $44.8 million or $1.69 per outstanding common share. The Company s working capital (current assets minus current liabilities) was $48.1 million. As discussed below in Capital Resources and Capital Requirements, the Company projects that its capital resources at March 31, 2010 will be sufficient to fund its operations and capital projects through the balance of 2010. To fund projected oil and gas exploration beyond the end of calendar 2010, it is anticipated that the Company will need to obtain additional capital. The Company is currently considering its alternatives, including financing of its real estate property in Gillette, Wyoming, reserve based lending and if necessary an additional equity raise. Additionally, the Company has in place a line of credit with a commercial bank in the amount of $10.0 million and is actively seeking a senior, secured revolving credit facility.At March 31, 2010, the Company had twelve producing wells. During the first quarter of 2010, the Company received on average $2.3 million per month from these producing wells with average operating cost of $82,000 per month, before non cash depletion expense, for average cash flows of $2.2 million per month from oil and gas production. The Company anticipates that cash flows from oil and gas operations will increase through the balance of 2010 as the remaining wells being drilled with Brigham Oil & Gas, L.P. (“Brigham”) a Delaware limited partnership wholly-owned by Brigham Exploration Company (a Delaware corporation), begin to produce. Decreases in the price of oil and natural gas and declines in production rates however could decrease these monthly cash flow amounts.
At March 31, 2010, the Company had $19.3 million in cash and cash equivalents and $25.5 million in U.S. Treasuries. The Company has invested its cash in interest bearing accounts, with the majority invested in U.S. Government Treasuries. During the past two years, this investment policy has insured the preservation of principal and yielded a return.
The Company had an investment of $3.0 million in a geothermal company, Standard Steam Trust, LLC, (“SST”) as of December 31, 2009 representing an ownership interest of 23.8%. This investment was increased by an equity gain of $963,000 in the first quarter of 2010, leaving a net investment at March 31, 2010 of $3.9 million. As a result of not funding a cash call in the first quarter of 2010, the Company s ownership interest of SST was reduced from 23.8% to 22.8%. SST plans on continuing its temperature gradient drilling and the acquisition of additional prospective geothermal properties during 2010. The Company has not budgeted any capital resources for further investment in SST during 2010 but may elect to participate in cash calls during the year. The Company is not obligated to fund cash calls and will suffer further dilution if it elects not to fund.
The Company recorded net income after taxes of $1.5 million, or $0.06 per share basic and $0.05 diluted, for the quarter ended March 31, 2010 as compared to a net loss after taxes of $2.3 million, or $0.11 per share basic and diluted, during the quarter ended March 31, 2009.
Oil and gas operations produced net operating income of $4.3 million during the quarter ended March 31, 2010 as compared to a loss of $1.2 million from oil and gas operations during the quarter ended March 31, 2009. The following table details the results of operations from the oil and gas sector for the quarters ended March 31, 2010 and 2009:
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