THIRD QUARTER 2023 HIGHLIGHTS
- Net daily production of 1,652 barrels of oil equivalent per day (“Boe/d”), a 6% decrease over third quarter of 2022
- Oil production of 100,071 barrels, or 66% of total production
- Lease Operating Expense of
$4.0 million , or $26.31 per Boe, a 23% and 19% decrease, respectively, from third quarter of 2022 - Adjusted EBITDA of $1.6 million during the quarter
PRODUCTION UPDATE
During the third quarter of 2023, the Company produced 152,013 Boe, or an average of 1,652 Boe/d, a 6% decrease compared to 161,206 Boe, or an average of 1,752 Boe/d, during the third quarter of 2022.
Three months ended | ||||||||
2023 | 2022 | |||||||
Sales volume | ||||||||
Oil (Bbls) | 100,071 | 95,429 | ||||||
Natural gas and liquids (Mcfe) | 311,654 | 394,659 | ||||||
BOE | 152,013 | 161,206 | ||||||
Average daily production (BOE/Day) | 1,652 | 1,752 | ||||||
Average sales prices: | ||||||||
Oil (Bbls) | $ | 78.05 | $ | 94.09 | ||||
Natural gas and liquids (Mcfe) | $ | 2.98 | $ | 7.15 | ||||
BOE | $ | 57.50 | $ | 73.19 | ||||
THIRD QUARTER 2023 FINANCIAL RESULTS
Total oil and gas sales during the third quarter of 2023 were approximately $8.7 million, compared to $11.8 million in the third quarter of 2022. The decline in revenue was primarily due to a 21% decline in realized prices. Sales from oil production represented 89% of total revenue during the quarter, up from 76% in the third quarter of 2022.
Lease operating expense (“LOE”) for the third quarter of 2023 was approximately $4.0 million, or $26.31 per Boe, as compared to $5.2 million, or $32.28, in the third quarter of 2022. The decrease in LOE was due primarily to the successful integration of acquired assets and the completion of necessary workover programs.
Cash general and administrative (“G&A”) expenses were approximately
Adjusted EBITDA was $1.6 million in the third quarter of 2023, compared to adjusted EBITDA of $3.1 million in the third quarter of 2022. The Company reported a net loss of
BALANCE SHEET UPDATE
As of
HEDGING PROGRAM UPDATE
During the third quarter of 2023, the Company entered into fixed priced crude oil swaps with settlement dates from the fourth quarter of 2023 through the fourth quarter of 2024. The following table reflects the Company's hedged volumes under commodity derivative contracts and the average floor and ceiling or fixed swap prices at which production is hedged as of
Collars | |||||||||||||
Period | Commodity | Volume (Bbls) | Floor ($/bbl) | Ceiling ($/bbl) | |||||||||
Q4 2023 | Crude Oil | 51,200 | $ | 60.00 | $ | 81.04 | |||||||
Swaps | |||||||||||||
Period | Commodity | Volume (Bbls) | Price ($/bbl) | ||||||||||
Q4 2023 | Crude Oil | 18,000 | $ | 86.64 | |||||||||
Q1 2024 | Crude Oil | 53,300 | $ | 84.07 | |||||||||
Q2 2024 | Crude Oil | 48,600 | $ | 81.76 | |||||||||
Q3 2024 | Crude Oil | 45,000 | $ | 79.80 | |||||||||
Q4 2024 | Crude Oil | 40,720 | $ | 78.15 | |||||||||
STRATEGIC ALTERNATIVES
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 | $ | 1,974 | $ | 4,411 | ||||
Oil and natural gas sales receivable | 3,486 | 3,193 | ||||||
Marketable equity securities | 161 | 107 | ||||||
Commodity derivative asset -current | 58 | - | ||||||
Other current assets | 817 | 558 | ||||||
Real estate assets held for sale, net of selling costs | 175 | 175 | ||||||
Total current assets | 6,671 | 8,444 | ||||||
Oil and natural gas properties under full cost method: | ||||||||
Unevaluated properties | - | 1,584 | ||||||
Evaluated properties | 203,375 | 203,144 | ||||||
Less accumulated depreciation, depletion and amortization | (103,919 | ) | (96,725 | ) | ||||
Net oil and natural gas properties | 99,456 | 108,003 | ||||||
Property and equipment, net | 964 | 651 | ||||||
Right-of-use asset | 733 | 868 | ||||||
Commodity derivative asset-noncurrent | 16 | - | ||||||
Other assets | 317 | 354 | ||||||
Total assets | $ | 108,157 | $ | 118,320 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 8,836 | $ | 7,832 | ||||
Accrued compensation and benefits | 817 | 1,111 | ||||||
Commodity derivative liability-current | 422 | 1,694 | ||||||
Asset retirement obligations-current | 1,850 | 668 | ||||||
Current lease obligation | 179 | 189 | ||||||
Total current liabilities | 12,104 | 11,494 | ||||||
Credit facility | 12,000 | 12,000 | ||||||
Asset retirement obligations- noncurrent | 16,777 | 14,774 | ||||||
Long-term lease obligation, net of current portion | 658 | 794 | ||||||
Deferred tax liability | 446 | 898 | ||||||
Other noncurrent liabilities | - | 6 | ||||||
Total liabilities | 41,985 | 39,966 | ||||||
Commitments and contingencies (Note 8) | ||||||||
Shareholders’ equity: | ||||||||
Common stock, | 255 | 250 | ||||||
Additional paid-in capital | 218,245 | 216,690 | ||||||
Accumulated deficit | (152,328 | ) | (138,586 | ) | ||||
Total shareholders’ equity | 66,172 | 78,354 | ||||||
Total liabilities and shareholders’ equity | $ | 108,157 | $ | 118,320 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
(In thousands, except share and per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue: | ||||||||||||||||
Oil | $ | 7,811 | $ | 8,979 | $ | 21,935 | $ | 28,146 | ||||||||
Natural gas and liquids | 930 | 2,820 | 3,057 | 6,005 | ||||||||||||
Total revenue | 8,741 | 11,799 | 24,992 | 34,151 | ||||||||||||
Operating expenses: | ||||||||||||||||
Lease operating expenses | 3,999 | 5,204 | 12,147 | 12,349 | ||||||||||||
Gathering, transportation and treating | 167 | 119 | 419 | 356 | ||||||||||||
Production taxes | 596 | 817 | 1,654 | 2,302 | ||||||||||||
Depreciation, depletion, accretion and amortization | 2,868 | 2,528 | 8,181 | 6,985 | ||||||||||||
Impairment of oil and natural gas properties | 6,495 | - | 6,495 | - | ||||||||||||
General and administrative expenses | 2,824 | 2,708 | 8,964 | 8,296 | ||||||||||||
Total operating expenses | 16,949 | 11,376 | 37,860 | 30,288 | ||||||||||||
Operating income (loss) | (8,208 | ) | 423 | (12,868 | ) | 3,863 | ||||||||||
Other income (expense): | ||||||||||||||||
Commodity derivative gain (loss) | (504 | ) | 4,025 | 704 | (4,944 | ) | ||||||||||
Interest expense | (306 | ) | (187 | ) | (864 | ) | (295 | ) | ||||||||
Other income (expense), net | 68 | (122 | ) | 46 | (168 | ) | ||||||||||
Total other income (expense) | (742 | ) | 3,716 | (114 | ) | (5,407 | ) | |||||||||
Net income (loss) before income taxes | $ | (8,950 | ) | $ | 4,139 | $ | (12,982 | ) | $ | (1,544 | ) | |||||
Income tax (expense) benefit | 162 | (29 | ) | 432 | 2,392 | |||||||||||
Net income (loss) | $ | (8,788 | ) | $ | 4,110 | $ | (12,550 | ) | $ | 848 | ||||||
Basic weighted shares outstanding | 25,428,874 | 24,390,193 | 25,265,662 | 24,548,385 | ||||||||||||
Diluted weighted shares outstanding | 25,428,874 | 24,682,476 | 25,265,662 | 24,891,148 | ||||||||||||
Basic earnings (loss) per share | $ | (0.35 | ) | $ | 0.16 | $ | (0.50 | ) | $ | 0.03 | ||||||
Diluted earnings (loss) per share | $ | (0.35 | ) | $ | 0.16 | $ | (0.50 | ) | $ | 0.03 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
(in thousands)
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (12,550 | ) | $ | 848 | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation, depletion, accretion, and amortization | 8,181 | 6,985 | ||||||
Impairment of oil and natural gas properties | 6,495 | - | ||||||
Deferred income taxes | (452 | ) | (2,460 | ) | ||||
Total commodity derivative (gains) losses, net | (704 | ) | 4,944 | |||||
Commodity derivative settlements paid | (642 | ) | (6,099 | ) | ||||
Loss on marketable equity securities | (54 | ) | 85 | |||||
Impairment and loss on real estate held for sale | - | 75 | ||||||
Amortization of debt issuance costs | 37 | 32 | ||||||
Stock-based compensation | 1,951 | 2,594 | ||||||
Right of use asset amortization | 135 | 140 | ||||||
Changes in operating assets and liabilities: | - | - | ||||||
Oil and natural gas sales receivable | (292 | ) | (3,587 | ) | ||||
Other assets | 395 | 320 | ||||||
Accounts payable and accrued liabilities | 1,047 | 5,456 | ||||||
Accrued compensation and benefits | (294 | ) | (479 | ) | ||||
Payments on operating lease liability | (145 | ) | (68 | ) | ||||
Payments on asset retirement obligations | (131 | ) | (289 | ) | ||||
Net cash provided by operating activities | $ | 2,977 | $ | 8,497 | ||||
Cash flows from investing activities: | ||||||||
Acquisition of proved properties | $ | - | $ | (12,610 | ) | |||
Oil and natural gas capital expenditures | (2,878 | ) | (5,369 | ) | ||||
Property and equipment expenditures | (487 | ) | (379 | ) | ||||
Proceeds from sale of oil and gas properties | - | 1,250 | ||||||
Net cash used in investing activities | $ | (3,365 | ) | $ | (17,108 | ) | ||
Cash flows from financing activities: | ||||||||
Borrowings on credit facility | $ | 500 | $ | 15,200 | ||||
Repayment of debt | (500 | ) | (6,047 | ) | ||||
Payment of fees for credit facility | - | (207 | ) | |||||
Repayments of insurance premium finance note payable | (465 | ) | (396 | ) | ||||
Exercise of warrant | - | 195 | ||||||
Shares withheld to settle tax withholding obligations for restricted stock awards | (151 | ) | (307 | ) | ||||
Dividends paid | (1,192 | ) | (1,156 | ) | ||||
Repurchases of common stock | (241 | ) | - | |||||
Net cash used in financing activities | $ | (2,049 | ) | $ | 7,282 | |||
Net decrease in cash and equivalents | (2,437 | ) | (1,329 | ) | ||||
Cash and equivalents, beginning of period | 4,411 | 4,422 | ||||||
Cash and equivalents, end of period | $ | 1,974 | $ | 3,093 | ||||
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 | |||||||
Adjusted EBITDA Reconciliation | ||||||||
Net Income (Loss) | $ | (8,788 | ) | $ | 4,110 | |||
Depreciation, depletion, accretion and amortization | 2,868 | 2,528 | ||||||
Unrealized loss (gain) on commodity derivatives | 356 | (5,637 | ) | |||||
Interest Expense | 306 | 187 | ||||||
Deferred income taxes | (164 | ) | - | |||||
Non-cash stock based compensation | 617 | 485 | ||||||
Transaction related acquired realized derivative losses | - | 1,371 | ||||||
Loss (gain) on marketable securities | (70 | ) | 45 | |||||
Impairment of oil and natural gas properties | 6,495 | - | ||||||
Total Adjustments | 10,408 | (1,021 | ) | |||||
Total Adjusted EBITDA | $ | 1,620 | $ | 3,089 | ||||
Source:
2023 GlobeNewswire, Inc., source