U.S. Energy (US:USEG)2025-11-12 13:01Financial Performance - Total revenue for Q3 2025 was $1,738,000, a decrease of 65% compared to $4,957,000 in Q3 2024[18] - Net loss for Q3 2025 was $3,341,000, compared to a net loss of $2,247,000 in Q3 2024, representing an increase in loss of 48.6%[18] - Oil revenue for Q3 2025 was $1,587,000, a decrease of 63.7% from $4,375,000 in Q3 2024[18] - Operating loss for Q3 2025 was $3,379,000, compared to an operating loss of $4,152,000 in Q3 2024, a decrease in loss of 18.6%[18] - Basic and diluted loss per share for Q3 2025 was $0.10, compared to $0.08 in Q3 2024, reflecting a 25% increase in loss per share[18] - For the nine months ended September 30, 2025, the net loss was $12,510,000, a decrease from a net loss of $13,758,000 in the same period of 2024, representing a 9.1% improvement[20] - Total revenue for the nine months ended September 30, 2025, was $5.959 million, a decrease of $10.435 million or 64% compared to $16.394 million in the same period of 2024, driven by a 60% decline in production quantities[141] - Oil revenue dropped by 64% to $5.201 million, while natural gas and liquids revenue fell by 58% to $758 thousand for the nine months ended September 30, 2025[141] Assets and Liabilities - Total current assets decreased to $2,799,000 as of September 30, 2025, down from $9,724,000 as of December 31, 2024, a decline of 71.2%[16] - Total liabilities decreased to $21,458,000 as of September 30, 2025, down from $25,846,000 as of December 31, 2024, a reduction of 17.0%[17] - Total assets decreased to $46,497,000 as of September 30, 2025, down from $49,667,000 as of December 31, 2024, a decline of 4.4%[16] - Accumulated deficit increased to $(210,428,000) as of September 30, 2025, compared to $(197,918,000) as of December 31, 2024, an increase of 6.3%[17] - The Company had asset retirement obligations totaling $13.031 million as of September 30, 2025, down from $14.083 million at the beginning of the year[74] Cash Flow and Financing - Net cash used in operating activities was $(6,281,000) for 2025, compared to $2,891,000 provided in 2024, indicating a significant decline in cash flow from operations[20] - The company reported cash and equivalents of $1,415,000 at the end of the period, an increase from $1,155,000 at the end of the same period in 2024[20] - The company’s net cash provided by financing activities was $9,641,000 in 2025, a significant increase compared to $(5,778,000) in 2024, indicating improved financing conditions[20] - Cash used in operating activities was $6.3 million for the nine months ended September 30, 2025, primarily due to a net loss of $12.5 million[166] - Cash used in investing activities was $9.7 million for the nine months ended September 30, 2025, compared to cash provided of $0.7 million in the same period of 2024[167] - Cash provided by financing activities was $9.6 million for the nine months ended September 30, 2025, driven by the equity offering[168] Capital Expenditures and Investments - The company incurred $7,653,000 in industrial gas capital expenditures in 2025, a substantial increase from $1,599,000 in 2024, reflecting a focus on expansion[20] - The acquisition of industrial gas properties amounted to $2,128,000 in 2025, down from $2,368,000 in 2024, indicating a slight reduction in acquisition spending[20] - The Company anticipates capital expenditures of approximately $9.8 million for the acquisition and development of industrial gas properties during the nine months ended September 30, 2025[163] Shareholder Activities - The company completed a related party acquisition of 24,000 net operated acres for a total consideration of $4.7 million, which included $2 million in cash and 1,400,000 shares of common stock[36][38] - On January 27, 2025, the Company repurchased a total of 635,400 shares of common stock for an aggregate of $1.574 million, averaging approximately $2.48 per share, representing an 8.2% premium to the closing price on that date[62] - The ongoing share repurchase program was extended for up to $5.0 million, now scheduled to expire on June 30, 2026[69] - The Company repurchased a total of 3,514,370 shares under its ongoing share repurchase program, which is authorized for up to $5.0 million and set to expire on June 30, 2026[187] Operational Highlights - The company operates primarily in the exploration and production segment of the oil and natural gas industry, with significant properties in the Rockies, Mid-Continent, and Gulf Coast regions[26] - The Company drilled 2 new industrial gas wells in Montana during the first half of 2025, with first production anticipated in 2026[120] - The Company plans to seek additional opportunities in the oil, natural gas, and industrial gas sectors, including acquisitions and partnerships for exploration and development projects[125] Risk Factors - A prolonged U.S. federal government shutdown could adversely impact the company's business, operations, and financial condition due to delays in regulatory approvals and contract awards[181] - The company faces risks from tariffs and trade barriers imposed by the U.S. or foreign governments, which may lead to higher costs for raw materials and components[183] - Continued global trade tensions could materially affect the company's business, financial condition, results of operations, and cash flows[184] Internal Controls and Compliance - The company has identified a material weakness in internal control over financial reporting as of December 31, 2024, due to deficiencies in its accounting system[173] - The company plans to assess controls over a new accounting system implemented in January 2025 to remediate the identified material weakness by year-end 2025[175] - As of September 30, 2025, the company was in compliance with all financial covenants related to its credit facility[153]