About U.S. Energy

U.S. Energy Corp. operates as an independent energy company. The company focuses on the acquisition and development of oil and natural gas producing properties in the continental United States. The company's 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 Gulf Coast regions. The company has historically explored for and produced oil and natural gas through a non-operator business model, however, during 2020, it acquired operated properties in North Dakota, New Mexico, Wyoming and the Texas Gulf Coast. On January 5, 2022, the company closed the acquisitions of certain oil and gas properties from three separate sellers, representing a diversified portfolio of primarily operated, producing, oil-weighted assets located across the Rockies, West Texas, Eagle Ford, and Mid-Continent regions. Business Strategy The company's business strategy going forward is to enhance the value of its acquired operated assets through evaluation of certain properties with the goal of increasing production and reserves. The company continuously evaluates strategic alternative opportunities that will enhance stockholder value. The company's business strategy is to evaluate and pursue value-enhancing transactions. Oil and Natural Gas Operations The company participates in oil and natural gas projects as both a non-operating working interest owner through exploration and development agreements with various oil and natural gas exploration and production companies and as an operator. The company's working interest varies by project and may change over time based on the terms of its leases and operating agreements. The company is pursuing potential acquisitions of exploration, development and production-stage oil and natural gas properties or companies. As of December 31, 2022, the company's oil and natural gas leases covered 314,550 gross acres and 170,196 net acres. The company had 1,700 BOE per day average net production for 2022. On January 5, 2022, the company closed the acquisitions (the Closing) contemplated by three separate Purchase and Sale Agreements (as amended to date, the Purchase Agreements), previously entered into by it in 2021, with each of Lubbock Energy Partners LLC (Lubbock); Banner Oil & Gas, LLC, Woodford Petroleum, LLC and Llano Energy LLC (collectively, Banner), and Synergy Offshore LLC (Synergy, and collectively with Lubbock and Banner, (the Sellers). Pursuant to the Purchase Agreements, the company acquired certain oil and gas properties from the Sellers, representing a diversified portfolio of primarily operated, producing, oil-weighted assets located across the Rockies, West Texas, Eagle Ford, and Mid-Continent. The acquisition also included certain wells, contracts, technical data, records, personal property and hydrocarbons associated with the acquired assets (collectively with the oil and gas properties acquired, the Acquired Assets). In 2022, the company acquired certain operated oil and gas producing properties in Liberty County, Texas. The effective date of the transaction was April 1, 2022. The assets include approximately 1,022 acres, which are 100% held by production, a gas pipeline and associated infrastructure. In 2022, the company entered into a Purchase and Sale Agreement (the PSA) with ETXENERGY, LLC (the Seller). Pursuant to the PSA, the company agreed to acquire all of the Seller's rights to, and interest in, certain operated producing properties totaling approximately 16,600 net acres, located in Henderson and Anderson counties, Texas, adjacent to its existing assets in the area. The PSA closed on July 27, 2022, at which time the company acquired the ETXEnergy Assets. The effective date of the acquisition was June 1, 2022. Environmental Laws and Regulations Applicable to the company's business and operations, the federal Clean Air Act (CAA) regulates emissions, discharges and controls with respect to oil and natural gas production and natural gas processing operations. The Occupational Safety and Health Act (OSHA) also requires employee training and maintenance of records, and the OSHA hazard communication standard and the Environmental Protection Agency (EPA) community right-to-know regulations under the Emergency Planning and Community Right-to-Know Act of 1986 require that the company organizes and/or discloses information about hazardous materials used or produced in its operations. History U.S. Energy Corp., a Wyoming corporation, was founded in 1966. The company was incorporated in the state of Wyoming in 1966.