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U.S. Energy Corp. has acquired the operated oil and gas producing properties located adjacent to its existing assets in Liberty County, Texas. The all-cash transaction had a price tag of $1 million and has an effective date of April 1, 2022.
As of April 1, 2022, the properties had total estimated Proved Developed Producing reserves of approximately 88,510 barrels of oil and had a present value of estimated future net revenues before income taxes discounted at 10% (PV10) value of approximately $2.3 million. The properties are operated with a 97% working interest and 69% net revenue interest. The properties also contain approximately 1,022 net acres which are 100% held by production.
“We are pleased to announce our most recent acquisition, which furthers U.S. Energy’s stated strategy of consolidating assets that represent positive cash flowing properties in existing Company areas that hold significant upside potential,” said Ryan Smith, Chief Executive Officer of U.S. Energy, who continued.
“The Properties are being purchased at a substantial discount to their current PDP PV-10 reserve value while adding long lived oil reserves and immediate free cash flow to the U.S. Energy portfolio. Combined with our current infrastructure in the area, the acquired Properties contain numerous candidates for highly economic return to production opportunities from existing wells.
“Importantly, with U.S. Energy’s acquisition of the Panther City Pipeline, there is additional upside from near-term gas sales and moving third party gas volumes, improving both the economics and environmental impact of the entire area. U.S. Energy’s latest acquisition is yet another example of the Company taking advantage of our low-cost corporate structure and clean balance sheet to acquire assets at attractive valuations while using our expertise to realize economic upside and improve the environmental footprint in the areas in which we operate,” Smith concluded.
The consideration payable for the assets is $1.0 million in cash which is being funded from U.S. Energy’s existing cash on hand.
To contact the author, email andreson.n.paul@gmail.com
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