U.S. Energy Corp. (USEG) stock popped high today following the announcement of a definitive agreement concerning Transformative acquisitions. USEG stock price saw a surge of 23.94% to reach $5.84 a share at the time of this writing. The stock was red in the previous trade and declined by 1.05% at closing. Let’s take a closer look at this stock.
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U.S Energy Corp is the energy stock that operates via the development, exploration, and development of natural gas in the United States. The company had 1,255,236 reserves of barrel oil and 134 gross producing wells by the end of 2020.
Recent News of USEG stock:
U.S. Energy Corp today signed the purchase and sale agreements in order to purchase certain oil and gas assets from Synergy Offshore LLC, Lubbock Energy Partners LLC, and entities controlled by Sage Road Capital, LLC. According to agreements, USEG stock will issue 19,905,736 shares of its common stock, assume $3.3 million of indebtedness from the Sellers, and pay cash of $1.25 million. The total consideration based on the October 1, 2021 closing price of USEG stock will be $99.5 million. The sellers will own roughly 80.8% of the USEG common stock and existing shareholders of the U.S Energy will own 19.2% of its common stock.
The transaction will diversify the portfolio of the USEG stock and will consolidate the position of U.S Energy in the oil and natural gas industry. The management is anticipating that this transaction will be 19% accretive to cash flow per share in 2022.
Financial View of USEG stock:
U.S. Energy stock on August 13, 2021, announced second-quarter 2021 financial results according to which
- USEG generated $1.7 million in revenue from the sales of oil and natural gas in the second quarter of 2021. This compares to $0.2 million revenue from the sales of oil and natural gas in the same tenure of the previous year. 91% of revenue came from the production of oil during the reported quarter.
- USEG stock spent $477 thousand in lease operating expenses in the recently reported quarter. The company spent $333 thousand in operating expenses during the second quarter of 2020.
- USEG stock had a contract of 100 barrels of crude oil each day from July 1, 2021, to December 31, 2021, at $61.90 per barrel as of June 30, 2021.
Conclusion:
The recent definitive agreements to purchase oil and natural gas assets reflect the positive growth of the U.S Energy Corp. The transaction will increase the company’s board of directors from five to seven members that will help in the execution of the acquisition strategy on a larger scale.
