Asset A&D

U.S. Energy Acquires Operated Producing Assets in Texas

By Kunal Raj
November 09, 2020
a minute read
Oil Pumpjacks

NASDAQ-listed U.S. Energy Corp., through its wholly-owned subsidiary New Horizon Resources LLC, has entered into a Purchase and Sale Agreement with Houston-based Newbridge Resources LLC to acquire operated producing assets located in Liberty County, Texas for US$250,000 payable in shares of U.S. Energy restricted common stock.

The assets acquired include approximately 680 net acres located in Liberty County, Texas. The acreage is operated with a 100% working interest and 86% net revenue interest, and is held by production. The assets are estimated to contain Proven (1P) Reserves of approximately 242,300 barrels of oil (bbls) as of October 1st, 2020, of which 27% is proved developed producing, and had a present value of estimated future net revenues before income taxes discounted at 10% value of approximately US$1.2 million, based on strip pricing as of November 5th, 2020.

“We are very pleased to announce our most recent acquisition agreement, which represents U.S. Energy’s third acquisition of 2020 and shows the continued execution of our stated strategy of seeking to consolidate assets that represent mature, positive cash flowing properties. The properties are being purchased at highly accretive levels by any transactional metric and at a meaningful discount to their estimated existing reserve value while adding long lived oil reserves and immediate free cash flow to the U.S. Energy portfolio,” said Ryan Smith, CEO of U.S. Energy.

Denver-based U.S. Energy currently holds interests in various projects in the Williston basin of North Dakota, Zavala and Dimmit Counties of Texas, and Coastal Louisiana.

The transaction is subject to customary closing conditions, and is expected to close in Q4- 2020, with an effective date of November 1st, 2020.

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