US Energy (USEG) Q2 2024 earnings summary

Executive summary

• Closed major acquisition of 140,000–144,000 net acres of helium and industrial gas assets in Montana, with a second LOI for 24,000 net acres expected to close in Q4 2024.

• Divested South Texas/Karnes County properties for $5.2–$6.5 million, using proceeds for debt reduction and asset development.

• Net daily production averaged 1,221 Boe/d (64% oil), with weather-related downtime impacting output.

• Net loss of $2.0 million for Q2 2024, improved from a $2.5 million loss in Q2 2023.

• Continued focus on operational efficiency, cost management, and share repurchases.

Financial highlights

• Q2 2024 revenue was $6.0–$6.1 million, down from $8.0 million in Q2 2023, mainly due to a 38% production decline and asset divestitures, partially offset by higher realized prices.

• Lease operating expense (LOE) was $3.1 million ($27.69/BOE), an 18% reduction in total LOE from Q2 2023.

• Adjusted EBITDA improved to $1.1 million from $0.8–$0.9 million in Q2 2023.

• Cash G&A expense was $1.6 million, down 38–43% year-over-year.

• Net debt reduced to $2.0 million post-quarter, with $20.0 million in available liquidity.

Outlook and guidance

• Two exploratory wells on Montana helium acreage to spud in September 2024, with results expected in Q4 2024.

• Additional 24,000 net acre acquisition in Montana expected to close in Q4 2024.

• LOE per BOE expected to revert to low $20s as operations normalize post-weather disruptions.

• G&A expected to continue trending down, with no significant increases anticipated from new development.

• No specific production or CapEx guidance for new wells until after initial results.