Financial Performance - Total revenue for Q1 2025 was $2,193,000, a decrease of 59.3% compared to $5,391,000 in Q1 2024[19] - Operating loss for Q1 2025 was $3,088,000, improved from an operating loss of $8,022,000 in Q1 2024[19] - Net loss for Q1 2025 was $3,111,000, compared to a net loss of $9,537,000 in Q1 2024, representing a 67.4% reduction[19] - Basic and diluted loss per share improved to $0.10 in Q1 2025 from $0.38 in Q1 2024[19] - The net loss attributable to common shareholders for the three months ended March 31, 2025, was $3,111,000, compared to a net loss of $9,537,000 for the same period in 2024, representing a 67.4% improvement[78] - Basic and diluted net loss per share for the three months ended March 31, 2025, was $(0.10), compared to $(0.38) for the same period in 2024[78] Cash and Liquidity - Cash and equivalents increased to $10,502,000 as of March 31, 2025, up from $7,723,000 at the end of 2024[23] - Cash used in operating activities was $4.544 million for the three months ended March 31, 2025, compared to $603 thousand in 2024, mainly due to a net loss of $3.1 million[137] - Cash used in investing activities was $2.422 million, significantly higher than $179 thousand in the comparable period of 2024, primarily due to the Synergy acquisition[138] - Cash provided by financing activities was $9.745 million, a substantial increase from cash used of $563 thousand in 2024, driven by an equity offering that raised $11.9 million[139] - As of March 31, 2025, the Company had no outstanding amounts under the Credit Agreement after repaying the remaining balance of $2.0 million on September 10, 2024[52] Assets and Liabilities - Total assets rose to $55,835,000 as of March 31, 2025, compared to $49,667,000 at the end of 2024, reflecting a 12.4% increase[18] - Total liabilities decreased to $22,277,000 as of March 31, 2025, down from $25,846,000 at the end of 2024, a reduction of 13.1%[18] - Shareholders' equity increased to $33,558,000 as of March 31, 2025, compared to $23,821,000 at the end of 2024, marking a 40.9% increase[18] Revenue Breakdown - In the Rockies region, oil revenue decreased to $1.357 million from $1.721 million, while natural gas and liquids revenue increased to $69,000 from $41,000[41] - Oil revenue fell by 63% to $1.77 million, while natural gas and liquids revenue decreased by 36% to $423,000 for the same period[119] - Production quantities dropped by 57%, with 47,008 barrels of oil equivalent (BOE) produced in Q1 2025, down from 109,800 BOE in Q1 2024[119] - The average sales price for oil decreased by 14% to $59.01 per barrel, while the average sales price for natural gas and liquids increased by 54% to $4.14 per Mcfe[119] Acquisitions and Investments - The company acquired industrial gas properties for $2,128,000 during Q1 2025[23] - The Company acquired 24,000 net operated acres in Montana for a total consideration of $4.7 million, which includes $2.0 million in cash and 1,400,000 shares of common stock[39] - The company plans to use proceeds from the stock offering for the development of its recent acquisition in Montana and general corporate purposes[58] Shareholder Activities - The company issued 4,871,400 shares in an underwritten offering, netting $11,877,000[21] - The ongoing share repurchase program has been extended until June 30, 2026, with $5.0 million authorized for repurchases[110] - During the first quarter of 2025, the company repurchased a total of 125,600 shares at an average price of $1.87 per share, with a remaining authorization of approximately $3,596,161 under the share repurchase program[152] Operational Costs - For the three months ended March 31, 2025, total oil and natural gas production costs decreased to $1.773 million, a reduction of $1.820 million or 51% compared to $3.593 million in 2024[120] - Lease operating expenses were $1.609 million, down $1.577 million or 49% from $3.186 million in the prior year, while lease operating expense per BOE increased by 18% to $34.23[120] - Gathering, transportation, and treating costs fell to $16 thousand, a decrease of $48 thousand or 75% compared to the same period in 2024[121] - Production taxes decreased to $148 thousand, down $195 thousand or 57% from $343 thousand in 2024, remaining between 6% and 7% of revenue[122] - General and administrative expenses increased to $2.389 million, an increase of $183 thousand or 8% compared to $2.206 million in 2024, primarily due to higher professional fees and stock-based compensation[125] Financial Reporting and Controls - The Company is currently assessing the impact of new accounting standards on its financial disclosures, including ASU 2023-09 and ASU 2024-03[34][36] - As of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls were not effective due to a material weakness in internal control over financial reporting as of December 31, 2024[143] - A material weakness was identified related to the accounting system, which lacked certain functionalities such as system-based account reconciliations and independent evaluation of third-party IT controls[144] - The company began outsourcing day-to-day accounting to a third-party provider in January 2025, aiming to remediate the material weakness by year-end 2025[146] - There were no changes in internal control over financial reporting during the three months ended March 31, 2025, that materially affected the company's internal controls[147] Risk Factors and Future Outlook - Significant credit risk exists, with Purchaser A accounting for 46% of total oil and natural gas revenue for the three months ended March 31, 2025, compared to 28% in 2024[42] - The company expects to record a write-down of oil and natural gas properties in the second quarter of 2025, estimated between $7.0 million and $8.0 million, due to lower commodity prices[92] - The company anticipates capital expenditures for industrial gas development to range between $3.5 million and $4.5 million in 2025[130] - The company is not currently involved in any legal proceedings that could materially affect its business or financial condition[149] - There have been no material changes to the risk factors previously disclosed in the Annual Report for the year ended December 31, 2024[151]
U.S. Energy (USEG) - 2025 Q1 - Quarterly Report