U.S. Energy Corp. Weathers Flooding, Posts Q1 2024 Production and Earnings

U.S. Energy Corp. reported a net daily production of 1,200 barrels of oil equivalent per day in Q1 2024 despite severe flooding in East Texas and the Gulf Coast. The company posted a net loss of $9.5 million and adjusted EBITDA of $0.2 million for the quarter ended March 31, 2024.

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U.S. Energy Corp. Weathers Flooding, Posts Q1 2024 Production and Earnings

U.S. Energy Corp. Weathers Flooding, Posts Q1 2024 Production and Earnings

U.S. Energy Corp. (NASDAQ: USEG) has reported its first quarter 2024 results, achieving a net daily production of 1,200 barrels of oil equivalent per day despite severe flooding in East Texas and the Gulf Coast. The independent energy company posted a net loss of $9.5 million and adjusted EBITDA of $0.2 million for the quarter ended March 31, 2024.

Why this matters: The energy sector's resilience in the face of natural disasters has significant implications for the global economy and energy security. The ability of companies like U.S. Energy Corp. to maintain production levels despite adverse weather conditions can impact the stability of oil prices and the overall energy market.

Oil production accounted for 62% of U.S. Energy's total output in Q1, with natural gas and natural gas liquids (NGLs) making up the remainder in an approximately even split. Lease operating expense totaled $3.2 million, flat compared to the prior quarter and down from the first quarter of 2023. The company's per barrel cost averaged around $29 per barrel of oil equivalent (BOE) in Q1, but would have been in the low $20 range if March's exit production rate held for the full quarter.

Severe flooding in East Texas and along the Gulf Coast heavily impacted U.S. Energy's operations during the quarter. While nearly all affected production was restored by late March, the company cautioned that additional heavy rains may impact some Gulf Coast assets in the second quarter. U.S. Energy has focused on cost management in the face of the adverse weather, and plans to continue allocating capital efficiently to maintain its existing production profile, continue share repurchases, preserve balance sheet strength, and pursue organic acquisition opportunities.

"Our focus at U.S. Energy remains on operational efficiency, balance sheet discipline, and responsible resource management, underscoring our commitment to driving sustainable value creation," said CEO Ryan Smith. The company closed asset divestitures in the fourth quarter of 2023 and used operating cash flow of approximately $3 million and investing cash flow of $106 million in Q1 2024. U.S. Energy ended the quarter with roughly $625 million in cash and investments and no debt on its balance sheet.

U.S. Energy Corp. reported a loss of ($0.17) per share for the first quarter of 2024. The company's stock closed at $1.1450 on May 12, 2024, up 14.5% year-to-date after undergoing a 1-for-10 reverse split on January 6, 2020. U.S. Energy is slated to release its second quarter 2024 earnings results on Monday, August 12.

Key Takeaways

  • U.S. Energy Corp. reports Q1 2024 net daily production of 1,200 BOE/day despite severe flooding.
  • Net loss of $9.5 million, adjusted EBITDA of $0.2 million for the quarter ended March 31, 2024.
  • Oil production accounts for 62% of total output, with natural gas and NGLs making up the remainder.
  • Per barrel cost averaged $29/BOE in Q1, would have been in the low $20 range if March's exit rate held.
  • Company focuses on cost management, plans to maintain production profile, continue share repurchases, and pursue organic acquisitions.