U.S. Energy Corp. (Nasdaq:USEG), reported its second quarter 2012 highlights, selected financial results for the quarter ended June 30, 2012, and provided an operational update.
Financial and Operational Results
• Revenues from the sale of crude oil and natural gas were $8.5 million as compared to $7.0 million in revenues in the second quarter of 2011, an increase of 21%.
• Produced 118,783 BOE during the quarter, or 1,305 BOE/D, from 48 gross (13.96 net) producing wells at June 30, 2012. This represents a 16% increase from production volumes in the second quarter of 2011 and a 6% sequential increase from production volumes in the first quarter of 2012.
• During the quarter ended June 30, 2012, the Company recorded income from continuing operations of $245,000 and a loss from discontinued operations of $1,235,000. As a result, we recorded a net loss after taxes of $990,000 or $0.04 per share basic and diluted, as compared to a net loss after taxes of $75,000 or less than $0.01 per share basic and diluted during the same period of 2011.
• During the six months ended June 30, 2012, we received an average of $2.8 million per month from our producing wells with an average operating cost of $425,000 per month (excluding workover costs), and production taxes of $302,000 before non-cash depletion expense, for an average cash flow of $2.1 million per month from oil and gas production.
• At June 30, 2012, the Company had $3.9 million in cash and cash equivalents on hand. Working capital (current assets minus current liabilities) was $13.1 million.
• On April 10, 2012 the commitment amount for our senior credit facility with Wells Fargo, NA increased to $100 million (from $75 million) and the borrowing base increased to $30 million (from $28 million). On May 1, 2012 the Company borrowed $5.0 million to fund our drilling programs.
• On June 8, 2012, the Company sold an undivided 87.5% of its acreage in Daniels County, Montana to a third party for $3.7 million. Under the terms of the agreement, the Company retained a 12.5% working interest in the acreage and reserved overriding royalty interests ("ORRI") equal to the positive difference, if any, between existing lease burdens of record and 20%. The purchaser also committed to drill a vertical test well to depths sufficient to core the Bakken and Three Forks formations on or before December 31,