The U.S. Energy Corp. (NASDAQ: USEG) disclosed today that it has signed an Asset Purchase Agreement and executed the transaction to buy operated and non-operated producing assets. The acquired property located in Lea County, New Mexico, and Converse County, Wyoming. This acquisition is the second acquisition of U.S Energy in 2020.
The acquired properties had total estimated proved reserves of approximately 237,263 Boe (63% oil), all of which are Proved Developed Producing reserves and had a present value of estimated future net revenues before income taxes discounted at 10% (PV10) value of approximately $2.5 million, as of August 1, 2020.
The financial consideration paid at closing by U.S. Energy included $500,000 in cash. U.S Energy Corp. has also revealed that the company entered into a $375,000 Secured Promissory Note with the largest shareholder of the Company, APEG Energy II, L.P. All the profits the company gained will be used in the current acquisition.
U.S. Energy Corp. (NASDAQ: USEG) shares went up 0.70% as it gained +0.03 at $4.32 during the trading session of Monday. In the past 52-weeks of trading, this company’s stock fluctuated between the low range of $2.44 and a high range of $9.55. USEG has moved up 77.01% from its 52-weeks low and has moved down -54.76% from its 52-weeks high. This company market capitalization has remained high, hitting $6.05 million at the time of writing.
The Properties, bought at an approximate 80% discount to their current PDP PV-10 reserve value, add reserves and immediate free cash flow, with operated acreage positions that are held by production to offer optionality for future opportunities. The Lea County, New Mexico assets comprise approximately 82% of total PDP volumes. While the Converse County, Wyoming assets include approximately 15% of total PDP volumes.