BIG SKY INDUSTRIAL INC. (BSIN)

U.S. Energy Corp. is an independent energy company focused on acquiring and developing oil and natural gas producing properties in the continental United States. It was incorporated in Wyoming in 1966 and reincorporated in Delaware in August 2022. Historically it operated as a non-operator, but since 2020 it has acquired operated properties. On January 5, 2022 it closed acquisitions from three sellers (Lubbock, Banner and Synergy) of primarily operated, producing, oil-weighted assets. Its strategy is to raise production and reserves by evaluating selected acquired operated properties, deploy capital conservatively and strategically, and pursue value-enhancing transactions.

The company participates in oil and gas projects both as an operator and as a non-operating working interest owner under exploration and development agreements with other exploration and production companies. Its working interests vary by project. As of December 31, 2022, it reported estimated proved reserves of 7,864,801 BOE (65% oil, 35% natural gas) with a standardized measure of $143.8 million. Its leases covered 314,550 gross and 170,196 net acres, with 767 gross (595 net) producing wells. Average net production in 2022 was about 1,700 BOE per day. It operates 86% of its reserves, and the other 14% are non-operated working interests in a diverse portfolio of oil-weighted prospects at various stages of exploration and development. Additional 2022 acquisitions included operated properties in Liberty County, Texas for $1.0 million in May, and operated properties in Henderson and Anderson Counties, Texas, with about 16,600 net acres and two pipeline gathering systems, for $11.875 million in July.

Its principal properties and operations are in the Rockies region (Montana, Wyoming and North Dakota), the Mid-Continent (Oklahoma, Kansas, and North and East Texas), West Texas, South Texas and the Gulf Coast. Horizontal drilling projects with operating partners are located in North Dakota, New Mexico, South Texas and West Texas. The text does not describe specific customers.

The company relies on operating partners, each with a substantial technical staff, and on specialized local consultants, so it does not need a full in-house staff of geologists, engineers and land personnel. It has a five-year revolving credit agreement with Firstbank Southwest as administrative agent, with a $20 million borrowing base after July 2022, a $100 million maximum credit amount, and $12.0 million outstanding at December 31, 2022. It also has an ISDA Master Agreement with NextEra for commodity price hedging. Its operations are subject to extensive federal, state and local environmental regulation, including CERCLA, RCRA, the Endangered Species Act and the Clean Air Act. Its principal executive office is at 1616 S. Voss Road, Suite 725, Houston, Texas.