U.S. Energy Corp. (NasdaqCM: USEG) detailed its 2014 oil and gas capex budget Feb. 11, the company said. For the year, $30.2 million was approved by the board of directors, the company added.
Out of that amount, $12.6 million goes toward the Booth-Tortuga and Big Wells acreage blocks in South Texas, where the Buda Lime formation is currently being developed, the company said.
The Booth-Tortuga lease is operated by Contango Oil and Gas Co. (NYSE MKT: MCF), while the Big Wells lease is operated by U.S. Enercorp Ltd., the company added. Contango contracted one full-time rig for the year, while U.S. Energy plans to drill nine gross wells in Booth-Tortuga and three gross wells in Big Wells, the company said.
Additionally, $9.6 million is allocated by U.S. Energy for its three Williston Basin drilling programs, which are scheduled to drill 23 gross wells, the company said.
Another $8 million is slated for additional south Texas and North Dakota acreage, or possibly for producing properties with proven reserves, the company said.
The capex budget will be funded through cash, cash flow from operations and revolving credit borrowings with Wells Fargo, the company said.
"We are pleased to announce our 2014 capex budget which reflects our continued focus on South Texas and the Williston Basin," said Keith G. Larsen, CEO.
He continued, "In the Williston Basin, we anticipate maintaining our base production rates, while we remain continuously optimistic about the potential to add meaningful production gains and reserves related to our South Texas drilling program during 2014."
Larsen added, "With the encouraging results we have seen to date, we are pleased that Contango has committed to a rig full time through 2014 as it will allow us to further define the Buda potential in the area and the boundaries in which it may produce in economic quantities. We are still uncertain as to the localized natural fracture and fault systems and how each may impact or enhance hydrocarbon recoveries. We will learn more from each well drilled as we progress through 2014.
U.S. Energy Corp., a natural resources exploration and development company, focuses on its South Texas and Williston oil and natural gas assets. It is based in Riverton, Wyo.