U.S. Energy Corp. (USEG) stock soared 11.69% in the current-market trading session at the price of $5.27 after it had entered into definitive purchase and sale agreements in connection with transformative acquisitions. USEG is an independent energy company in the United States. It works on the procurement and development of oil and natural gas producing properties.  

USEG Entered into Definitive Purchase Agreements 

On 5th October 2021, USEG published that it had entered into definitive purchase and sale agreements. The company will purchase oil and gas assets from Lubbock Energy Partners LLC, Synergy Offshore LLC, and Sage Road Capital LLC. As per the terms of the transaction, USEG will distribute 19,905,736 shares of common stock, pay $1.25 million of cash, and assume $3.3 millions of indebtedness from the Sellers.  

Upon completion of the agreement, existing USEG stockholders will own 19.2%, and the sellers will own 80.8% of the USEG’s outstanding common stock. As per the deal, the owner of one of the Sellers, John Weinzierl, will join the U.S. Energy Board of Directors as Chairman. Mr. Ryan Smith will continue serving as CEO, and the company’s Board of Directors will increase from five to seven members. The transactions will close in the fourth quarter of 2021 and are subject to customary closing conditions and regulatory approvals. 

Management Comments 

CEO of USEG, Ryan Smith, remarked that through these transactions they can replicate their opportunistic acquisition plan on a larger scale. These Transactions will add free cash flow, provide size and scale, and support their management team and Board. He welcomed John Weinzierl as Chairman with his strong track record and experience in the industry. The contributions of John, Board members, and shareholders will help them to execute their acquisition strategy, he added. Mr. Weinzierl commented that he is pleased to join the USEG Board upon closing. He is enthusiastic to leverage his experience and relationships in generating returns for the company’s shareholders.

USEG Second Quarter 2021 Financial Results 

On 12th August 2021, USEG published financial and operating results for the second quarter ended 30th June 2021. On 30th June 2021, USEG had cash of $6.6 million and shares outstanding of 4.7 million. The company had no existing debt as of 30th June 2021. Revenues from sales were $1.7 million during the second quarter of 2021. It represented oil production revenue of 91% of the total revenue during the quarter. The revenue totaled $0.2 million during the same period of 2020.