FULL YEAR 2023 HIGHLIGHTS
- Total daily production in 2023 averaged 1,711 Boe/d; oil production averaged 1,073 Bbl/d.
- Revenue totaled $32.3 million with oil sales of $28.4 million and natural gas and liquids sales of $4.0 million.
- Lease operating expense of
$15.3 million , or $24.43 per Boe, a 8% and 9% decrease, respectively, from 2022. - Oil and gas related capital expenditures of $3.4 million compared to $6.2 million in 2022.
- Generated Adjusted EBITDA, a non-GAAP measure, of $5.0 million for 2023.
- Ended the year with an outstanding debt balance of $5.0 million, $3.4 million of cash, total liquidity of
$18.4 million , and net debt to Adjusted EBITDA of 0.3x. - Launched a
$5.0 million share repurchase program, repurchasing more than 0.6 million shares of common stock, representing greater than 2% of outstanding shares, for approximately$0.7 million , from program initiation throughFebruary 2024 .
FOURTH QUARTER 2023 HIGHLIGHTS
- Completed the divestment of legacy non-core assets in the fourth quarter, generating
$7.3 million of sales proceeds used for debt repayment and an accelerated shareholder returns program. - Hedged an average of 514 Bbl/d oil production for full year 2024 at a weighted average price of
$81.16 per Bbl for oil. - Total daily production averaged 1,509 Boe/d; oil production averaged 928 Bbl/d.
- Revenue totaled
$7.3 million with oil sales of$6.4 million and natural gas and liquids sales of$0.9 million . - Lease operating expense of
$3.1 million , or$22.38 per Boe, a 22% and 15% decrease, respectively, from the third quarter 2023. - Oil and gas related capital expenditures of
$0.5 million , equivalent to the spend in the third quarter 2023. - Generated Adjusted EBITDA of
$1.4 million for the fourth quarter 2023.
MANAGEMENT COMMENTS
"I am pleased with our team’s performance during 2023, efforts which continue advancing the Company’s daily goal of unlocking shareholder value,” said
SHAREHOLDER RETURNS PROGRAM UPDATE
Since the beginning of the Company’s share repurchase program in
On
BALANCE SHEET UPDATE
As of December 31, 2023, the Company had debt outstanding of
The Company's cash and cash equivalents balance was $3.4 million at year end 2023.
FULL YEAR 2023 PRODUCTION AND PRICING UPDATE
For the full year 2023, the Company produced 624,420 Boe, or an average of 1,711 Boe/d, as compared to 620,579 Boe, or an average of 1,700 Boe/d during the prior year, 2022.
Change | ||||||||||||
2023 | 2022 | Percent | ||||||||||
Production quantities: | ||||||||||||
Oil (Bbls) | 391,645 | 396,456 | -1 | % | ||||||||
Gas (Mcfe) | 1,396,650 | 1,344,735 | 4 | % | ||||||||
BOE | 624,420 | 620,579 | 1 | % | ||||||||
BOE per day | 1,711 | 1,700 | 1 | % | ||||||||
Average sales prices: | ||||||||||||
Oil (Bbls) | $ | 72.39 | $ | 91.54 | -21 | % | ||||||
Gas (Mcfe) | $ | 2.84 | $ | 6.14 | -54 | % | ||||||
BOE | $ | 51.75 | $ | 71.79 | -28 | % | ||||||
FULL YEAR 2023 FINANCIAL AND OPERATING SUMMARY
For the full year 2023, revenue totaled
Lease operating expense, inclusive of workover expense, totaled $15.3 million, or $24.43 per Boe, a 8% and 9% decrease, respectively, from 2022. For the full year 2022, lease operating and workover expense totaled
Cash general and administrative expense totaled $9.2 million for the year, representing a 13% increase from 2022. Equity compensation expense totaled
FOURTH QUARTER PRODUCTION AND PRICING UPDATE
For the fourth quarter 2023, the Company produced 138,788 Boe, or an average of 1,509 Boe/d, as compared to 152,013 Boe, or an average of 1,652 Boe/d during the third quarter 2023.
Change | ||||||||||||
4Q 2023 | 3Q 2023 | Percent | ||||||||||
Production quantities: | ||||||||||||
Oil (Bbls) | 85,363 | 100,071 | -15 | % | ||||||||
Gas (Mcfe) | 320,546 | 311,654 | 3 | % | ||||||||
BOE | 138,788 | 152,013 | -9 | % | ||||||||
BOE per day | 1,509 | 1,652 | -9 | % | ||||||||
Average sales prices: | ||||||||||||
Oil (Bbls) | $ | 75.17 | $ | 78.05 | -4 | % | ||||||
Gas (Mcfe) | $ | 2.83 | $ | 2.98 | -5 | % | ||||||
BOE | $ | 52.77 | $ | 57.50 | -8 | % | ||||||
FOURTH QUARTER FINANCIAL AND OPERATING SUMMARY
Revenue totaled $7.3 million with $6.4 million generated by oil sales and $0.9 million through natural gas and liquids sales for the fourth quarter. When compared to the third quarter 2023, total revenue decreased by 16% while oil sales declined 18% and natural gas and liquids declined 2%, both primarily driven by assets divested during the fourth quarter of 2023 and a decline in realized commodity pricing.
Fourth quarter lease operating expense totaled
Cash general and administrative expense totaled $2.3 million for the quarter, representing a materially flat amount from the third quarter of 2023. Equity compensation expense totaled
For the fourth quarter of 2023,
RESERVES SUMMARY
The Company's year-end 2023
The
The present value of the Company's reported
HEDGE SUMMARY
The following table reflects the hedged volumes under
Fixed Price Swaps | ||||||||
Weighted | ||||||||
Quantity | Average | |||||||
Commodity/ Index/ Maturity Period | (Bbls) | Price | ||||||
NYMEX WTI | ||||||||
Crude Oil 2024 Contracts: | ||||||||
First quarter 2024 | 53,300 | $ | 84.07 | |||||
Second quarter 2024 | 48,600 | $ | 81.76 | |||||
Third quarter 2024 | 45,000 | $ | 79.80 | |||||
Fourth quarter 2024 | 40,720 | $ | 78.15 | |||||
Total 2024 | 187,620 | $ | 81.16 | |||||
CONFERENCE CALL DETAILS
A conference call will be held
ABOUT
We are a growth company focused on consolidating high-quality producing assets in
INVESTOR RELATIONS CONTACT
IR@usnrg.com
(303) 993-3200
www.usnrg.com
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
FINANCIAL STATEMENTS
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and equivalents | $ | 3,351 | $ | 4,411 | ||||
Oil and natural gas sales receivables | 2,336 | 3,193 | ||||||
Marketable equity securities | 164 | 107 | ||||||
Commodity derivative asset - current | 1,844 | - | ||||||
Other current assets | 527 | 558 | ||||||
Real estate assets held for sale, net of selling costs | 150 | 175 | ||||||
Total current assets | 8,372 | 8,444 | ||||||
Oil and natural gas properties under full cost method: | ||||||||
Unevaluated properties | - | 1,584 | ||||||
Evaluated properties | 176,679 | 203,144 | ||||||
Less accumulated depreciation, depletion, amortization, and impairment | (106,504 | ) | (96,725 | ) | ||||
Net oil and natural gas properties | 70,175 | 108,003 | ||||||
Other assets: | ||||||||
Property and equipment, net | 899 | 651 | ||||||
Right of use asset | 693 | 868 | ||||||
Other assets | 305 | 354 | ||||||
Total other assets | 1,897 | 1,873 | ||||||
Total assets | $ | 80,444 | $ | 118,320 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 4,064 | $ | 4,329 | ||||
Accrued compensation and benefits | 702 | 1,111 | ||||||
Revenue and royalties payable | 4,857 | 3,503 | ||||||
Commodity derivative liability - current | - | 1,694 | ||||||
Asset retirement obligations - current | 1,273 | 668 | ||||||
Current lease obligation | 182 | 189 | ||||||
Total current liabilities | 11,078 | 11,494 | ||||||
Noncurrent liabilities: | ||||||||
Credit facility | 5,000 | 12,000 | ||||||
Asset retirement obligations - noncurrent | 17,217 | 14,774 | ||||||
Long-term lease obligation, net of current portion | 611 | 794 | ||||||
Deferred tax liability | 16 | 898 | ||||||
Other noncurrent liabilities | - | 6 | ||||||
Total noncurrent liabilities | 22,844 | 28,472 | ||||||
Total liabilities | 33,922 | 39,966 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Shareholders’ equity: | ||||||||
Common stock, | 253 | 250 | ||||||
Additional paid-in capital | 218,403 | 216,690 | ||||||
Accumulated deficit | (172,134 | ) | (138,586 | ) | ||||
Total shareholders’ equity | 46,522 | 78,354 | ||||||
Total liabilities and shareholders’ equity | $ | 80,444 | $ | 118,320 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED (In thousands, except share and per share amounts) | ||||||||
2023 | 2022 | |||||||
Revenue: | ||||||||
Oil | $ | 28,352 | $ | 36,293 | ||||
Natural gas and liquids | 3,964 | 8,259 | ||||||
Total revenue | 32,316 | 44,552 | ||||||
Operating expenses: | ||||||||
Lease operating expenses | 15,254 | 16,667 | ||||||
Gathering, transportation, and treating | 557 | 573 | ||||||
Production taxes | 2,107 | 3,010 | ||||||
Depreciation, depletion, accretion, and amortization | 11,235 | 9,607 | ||||||
Impairment of oil and natural gas properties | 26,680 | - | ||||||
General and administrative expenses | 11,523 | 11,157 | ||||||
Total operating expenses | 67,356 | 41,014 | ||||||
Operating income (loss) | (35,040 | ) | 3,538 | |||||
Other income (expense): | ||||||||
Commodity derivative gain (loss), net | 2,882 | (5,682 | ) | |||||
Interest (expense), net | (1,114 | ) | (544 | ) | ||||
Other income (expense), net | 25 | (168 | ) | |||||
Total other income (expense) | 1,793 | (6,394 | ) | |||||
Net income (loss) before income taxes | $ | (33,247 | ) | $ | (2,856 | ) | ||
Income tax (expense) benefit | 891 | 1,893 | ||||||
Net income (loss) | $ | (32,356 | ) | $ | (963 | ) | ||
Basic and diluted weighted average shares outstanding | 25,322,382 | 24,668,219 | ||||||
Basic and diluted loss per share | $ | (1.28 | ) | $ | (0.04 | ) |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED (in thousands) | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (32,356 | ) | $ | (963 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation, depletion, accretion, and amortization | 11,235 | 9,607 | ||||||
Impairment of oil and natural gas properties | 26,680 | - | ||||||
Deferred income taxes | (882 | ) | (1,921 | ) | ||||
Total commodity derivatives (gains) losses, net | (2,882 | ) | 5,682 | |||||
Commodity derivative settlements paid | (656 | ) | (7,140 | ) | ||||
(Gains) losses on marketable equity securities | (57 | ) | 83 | |||||
Impairment and loss on real estate held for sale | 25 | 75 | ||||||
Amortization of debt issuance costs | 49 | 45 | ||||||
Stock-based compensation | 2,293 | 3,017 | ||||||
Right of use asset amortization | 175 | 205 | ||||||
Changes in operating assets and liabilities: | ||||||||
Oil and natural gas sales receivable | 851 | (2,261 | ) | |||||
Other assets | 687 | 150 | ||||||
Accounts payable accrued liabilities | (60 | ) | 1,414 | |||||
Accrued compensation and benefits | (410 | ) | (51 | ) | ||||
Revenue and royalties payable | 1,184 | 3,467 | ||||||
Payments on operating lease liability | (189 | ) | (104 | ) | ||||
Payments of asset retirement obligations | (215 | ) | (407 | ) | ||||
Net cash provided by (used in) operating activities | 5,472 | 10,898 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition of proved properties | - | (12,641 | ) | |||||
Oil and natural gas capital expenditures | (3,379 | ) | (6,208 | ) | ||||
Property and equipment expenditures | (488 | ) | (435 | ) | ||||
Proceeds from sale of oil and natural gas properties, net | 6,693 | 2,335 | ||||||
Net cash provided by (used in) investing activities: | 2,826 | (16,949 | ) | |||||
Cash flows from financing activities: | ||||||||
Borrowings on credit facility | 500 | 15,200 | ||||||
Payment of debt | (7,500 | ) | (6,547 | ) | ||||
Payment of fees for credit facility | - | (207 | ) | |||||
Payments on insurance premium finance note | (647 | ) | (559 | ) | ||||
Exercise of warrant | - | 195 | ||||||
Shares withheld to settle tax withholding obligations for restricted stock awards | (151 | ) | (307 | ) | ||||
Dividends paid | (1,192 | ) | (1,735 | ) | ||||
Repurchases of common stock | (368 | ) | - | |||||
Net cash provided by (used in) financing activities | (9,358 | ) | 6,040 | |||||
Net (decrease) increase in cash and equivalents | (1,060 | ) | (11 | ) | ||||
Cash and equivalents, beginning of year | 4,411 | 4,422 | ||||||
Cash and equivalents, end of year | $ | 3,351 | $ | 4,411 | ||||
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.
In thousands | Year Ended | |||||||
2023 | 2022 | |||||||
Adjusted EBITDA Reconciliation | ||||||||
Net Income (Loss) | $ | (32,356 | ) | $ | (963 | ) | ||
Depreciation, depletion, accretion and amortization | 11,235 | 9,607 | ||||||
Unrealized loss (gain) on commodity derivatives | (3,538 | ) | (1,458 | ) | ||||
Interest Expense, net | 1,114 | 544 | ||||||
Income tax expense (benefit) | (891 | ) | (1,893 | ) | ||||
Non-cash stock based compensation | 2,293 | 3,017 | ||||||
Transaction related expenses | - | 712 | ||||||
Transaction related acquired realized derivative losses | 496 | 5,347 | ||||||
Loss (gain) on marketable securities | (57 | ) | 83 | |||||
Loss (gain) on real estate held for sale | 25 | 75 | ||||||
Impairment of oil and natural gas properties | 26,680 | - | ||||||
Total Adjustments | 37,357 | 16,034 | ||||||
Total Adjusted EBITDA | $ | 5,001 | $ | 15,071 |
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