FIRST QUARTER 2023 HIGHLIGHTS
- Net daily production of 1,726 barrels of oil equivalent per day (“Boe/d”), a 29% increase over first quarter of 2022
- Produced oil volumes of 91,311 barrels, or 59% of total production
- Adjusted EBITDA of
$1.2 million - Returned
$0.6 million to shareholders through quarterly cash dividend - In
April 2023 , announced$5.0 million share repurchase program
MANAGEMENT COMMENTARY
“We are pleased with our operational performance in the first quarter and have continued to carry forward the momentum created during 2022,” said
“Looking ahead, we will continue to pursue opportunities to optimize our portfolio and enhance shareholder value. Our experienced team and long-standing relationships with industry partners give us a competitive edge in identifying and executing on value-enhancing opportunities. We are committed to disciplined capital allocation to create and maintain value and believe that building a diversified, well-balanced portfolio of producing assets is key to generating reliable cash flows and delivering consistent returns.”
PRODUCTION UPDATE
During the first quarter of 2023, the Company produced 155,329 Boe, or an average of 1,726 Boe/d, a 29% increase compared to 120,712 Boe, or an average of 1,341 Boe/d, during the first quarter of 2022.
1Q 2023 | 1Q 2022 | |||
Sales Volume (Total) | ||||
Oil (Bbls) | 91,311 | 90,821 | ||
Gas and liquids (Mcfe) | 384,106 | 179,343 | ||
Sales volumes (Boe) | 155,329 | 120,712 | ||
Average Daily Production (Boe/d) | 1,726 | 1,341 | ||
Average Sales Prices | ||||
Oil (Bbl) | ||||
Gas and liquids (Mcfe) | ||||
Barrel of Oil Equivalent | ||||
FIRST QUARTER 2023 FINANCIAL RESULTS
The Company recorded lease operating expense (“LOE”) of approximately
Severance and Ad Valorem taxes in the third quarter were approximately
Cash general and administrative (“G&A”) expenses were approximately
Based on a realized price of
Adjusted EBITDA, excluding the impact of hedges, was
RETURN OF CAPITAL PROGRAM
Consistent with the Company’s long-term return of capital strategy, the Company’s board of directors paid a
Subsequent to the end of the first quarter of 2023, the Company announced that its board of directors authorized a share repurchase program under which the Company may purchase up to
Finally, on
STRATEGIC UPDATE
HEDGING PROGRAM UPDATE
The following table reflects the hedged volumes under
Collars | |||||||
Period | Commodity | Volume (Bbls) | Floor ($ / Bbl) | Ceiling ($ / Bbl) | |||
Q2 2023 | Crude Oil | 53,500 | |||||
Q3 2023 | Crude Oil | 52,600 | |||||
Q4 2023 | Crude Oil | 51,200 |
Swaps | ||||
Period | Commodity | Volume (Bbls | MMBtu) | Avg Price ($/Bbl | $/MMBtu) | |
Q2 2023 | Crude Oil | 6,000 |
BALANCE SHEET UPDATE
As of
CONFERENCE CALL AND WEBCAST
A webcast of the conference call will be available in the Investor Relations section of the Company’s website at www.usnrg.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
ABOUT
We are a growth company focused on consolidating high-quality producing assets in
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.
Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, risks associated with the integration of the recently acquired assets; the Company’s ability to recognize the expected benefits of the acquisitions and the risk that the expected benefits and synergies of the acquisition may not be fully achieved in a timely manner, or at all; the amount of the costs, fees, expenses and charges related to the acquisitions; the Company’s ability to comply with the terms of its senior credit facilities; the ability of the Company to retain and hire key personnel; the business, economic and political conditions in the markets in which the Company operates; fluctuations in oil and natural gas prices, uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and timing of development activities; competition; operating risks; acquisition risks; liquidity and capital requirements; the effects of governmental regulation; adverse changes in the market for the Company’s oil and natural gas production; dependence upon third-party vendors; risks associated with COVID-19, the global efforts to stop the spread of COVID-19, potential downturns in the
The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of any Sale Agreement Parties are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and equivalents | $ | 2,421 | $ | 4,411 | ||||
Oil and natural gas sales receivable | 2,048 | 3,193 | ||||||
Marketable equity securities | 107 | 107 | ||||||
Other current assets | 1,160 | 558 | ||||||
Real estate assets held for sale, net of selling costs | 175 | 175 | ||||||
Total current assets | 5,911 | 8,444 | ||||||
Oil and natural gas properties under full cost method: | ||||||||
Unevaluated properties | 1,584 | 1,584 | ||||||
Evaluated properties | 204,282 | 203,144 | ||||||
Less accumulated depreciation, depletion, amortization and impairment | (98,825 | ) | (96,725 | ) | ||||
Net oil and natural gas properties | 107,041 | 108,003 | ||||||
Property and equipment, net | 861 | 651 | ||||||
Right-of-use asset | 813 | 868 | ||||||
Other assets | 343 | 354 | ||||||
Total assets | $ | 114,969 | $ | 118,320 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 7,641 | $ | 7,832 | ||||
Accrued compensation and benefits | 357 | 1,111 | ||||||
Commodity derivative liability-current | 369 | 1,694 | ||||||
Asset retirement obligations-current | 657 | 668 | ||||||
Current lease obligation | 174 | 189 | ||||||
Total current liabilities | 9,198 | 11,494 | ||||||
Credit facility | 12,000 | 12,000 | ||||||
Asset retirement obligations- noncurrent | 15,091 | 14,774 | ||||||
Long-term lease obligation, net of current portion | 750 | 794 | ||||||
Deferred tax liability | 836 | 898 | ||||||
Other noncurrent liabilities | 6 | 6 | ||||||
Total liabilities | 37,881 | 39,966 | ||||||
Commitments and contingencies (Note 8) | ||||||||
Shareholders’ equity: | ||||||||
Common stock, | 252 | 250 | ||||||
Additional paid-in capital | 217,265 | 216,690 | ||||||
Accumulated deficit | (140,429 | ) | (138,586 | ) | ||||
Total shareholders’ equity | 77,088 | 78,354 | ||||||
Total liabilities and shareholders’ equity | $ | 114,969 | $ | 118,320 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED (In thousands, except share and per share amounts) | ||||||||
2023 | 2022 | |||||||
Revenue: | ||||||||
Oil | $ | 7,095 | $ | 7,833 | ||||
Natural gas and liquids | 1,177 | 1,039 | ||||||
Total revenue | 8,272 | 8,872 | ||||||
Operating expenses: | ||||||||
Lease operating expense | 4,523 | 2,735 | ||||||
Production taxes | 520 | 572 | ||||||
Depreciation, depletion, accretion and amortization | 2,417 | 1,886 | ||||||
General and administrative expenses | 2,772 | 2,946 | ||||||
Total operating expenses | 10,232 | 8,139 | ||||||
Operating (loss) income | (1,960 | ) | 733 | |||||
Other income (expense): | ||||||||
Commodity derivative gain (loss) | 919 | (6,837 | ) | |||||
Marketable equity securities gain | - | 81 | ||||||
Interest expense, net | (268 | ) | (50 | ) | ||||
Total other income (expense) | 651 | (6,806 | ) | |||||
Net loss before income taxes | (1,309 | ) | (6,073 | ) | ||||
Income tax benefit | 62 | 2,689 | ||||||
Net loss | $ | (1,247 | ) | $ | (3,384 | ) | ||
Basic and diluted weighted average shares outstanding | 25,178,565 | 23,717,240 | ||||||
Basic and diluted net loss per share | $ | (0.05 | ) | $ | (0.14 | ) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED (in thousands) | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (1,247 | ) | $ | (3,384 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation, depletion, accretion, and amortization | 2,417 | 1,886 | ||||||
Deferred income taxes | (62 | ) | (2,689 | ) | ||||
Unrealized (gain) loss on commodity derivatives | (1,325 | ) | 5,193 | |||||
Gain on marketable equity securities | - | (81 | ) | |||||
Amortization of debt issuance costs | 12 | 10 | ||||||
Stock-based compensation | 727 | 1,500 | ||||||
Right of use asset amortization | 55 | 24 | ||||||
Changes in operating assets and liabilities: | ||||||||
Oil and natural gas sales receivable | 1,145 | (3,337 | ) | |||||
Other assets | 52 | (212 | ) | |||||
Accounts payable and accrued liabilities | (715 | ) | 2,594 | |||||
Accrued compensation and benefits | (754 | ) | (990 | ) | ||||
Payments on operating lease liability | (58 | ) | (27 | ) | ||||
Payments for asset retirement obligations | (11 | ) | - | |||||
Net cash provided by operating activities | 236 | 487 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition of properties | - | (783 | ) | |||||
Oil and natural gas capital expenditures | (1,106 | ) | (855 | ) | ||||
Expenditures for cash calls | - | (1,456 | ) | |||||
Property and equipment expenditures | (261 | ) | (159 | ) | ||||
Net cash used in investing activities | (1,367 | ) | (3,253 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings on credit facility | - | 4,000 | ||||||
Repayment of debt | - | (3,847 | ) | |||||
Payment of fees for credit facility | - | (172 | ) | |||||
Repayments of insurance premium finance note payable | (112 | ) | (78 | ) | ||||
Exercise of warrant | - | 195 | ||||||
Shares withheld to settle tax withholding obligations for restricted stock awards | (151 | ) | (307 | ) | ||||
Dividends paid | (596 | ) | - | |||||
Net cash used in financing activities | (859 | ) | (209 | ) | ||||
Net decrease in cash and equivalents | (1,990 | ) | (2,975 | ) | ||||
Cash and equivalents, beginning of period | 4,411 | 4,422 | ||||||
Cash and equivalents, end of period | $ | 2,421 | $ | 1,447 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. Please see Note-15- Supplemental Disclosures of Cash Flow Information.
ADJUSTED EBITDA RECONCILIATION
In addition to our results calculated under generally accepted accounting principles in
The Company’s presentation of this measure should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure, below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure.
Three Months Ended | ||||
2023 | 2022 | |||
Net Income | ||||
Depreciation, depletion, accretion and amortization | 2,417 | 1,886 | ||
Unrealized loss (gain) on commodity derivatives | (1,325) | 5,193 | ||
Interest Expense, net | 268 | 50 | ||
Deferred income taxes | (62) | (2,689) | ||
Non-cash stock-based compensation | 726 | 1,500 | ||
Transaction related expenses | - | 406 | ||
Transaction related acquired realized derivative losses | 405 | 1,220 | ||
Loss (gain) on marketable securities | - | (81) | ||
Total Adjustments | 2,429 | 7,485 | ||
Total Adjusted EBITDA | $1,182 | $4,101 | ||
INVESTOR RELATIONS CONTACT
IR@usnrg.com
(303) 993-3200
www.usnrg.com
Source:
2023 GlobeNewswire, Inc., source