U.S. Energy Corp. (USEG)

[nutsyprofessor]

I have to say I'm very impressed with the management of this company. These people are playing this downturn very intelligently by reducing CAPEX in North Dakota and focusing a more limited drilling program in South Texas where costs will be lower. I truly believe that US Energy Corp. will weather this downturn in oil prices exceptionally well. At these prices USEG should be a very good buy and poised for a nice comeback as oil prices begin to slowly move back towards $70-$80 a barrel, aimo.

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2015 Oil and Gas Capital Expenditure Budget

On December 4, 2014, the Company's Board of Directors approved an $8.2 million oil and gas capital expenditure budget for 2015. Under the approved budget, the Company currently plans to participate in the drilling of four wells located in South Texas during the year, comprised of two Eagle Ford wells with Contango Oil & Gas Company and two wells with U.S. Enercorp. The formation targets with U.S. Enercorp are yet to be determined pending the evaluation of our recent drilling in the leasehold.

Currently, the Company has not allocated Capex for the development of our portfolio of drilling locations located in Williston Basin of North Dakota during 2015. However, we will continue to monitor the economics of the basin and our drilling programs in particular, and if wells are proposed during the course of the year we could allocate additional funding for the drilling of these wells on a case-by-case basis. We currently participate in fifty seven 1,280 acre units in North Dakota and all of these units are held by production.

Actual timing of drilling and completing wells and the anticipated number of gross and net wells to be drilled could vary in each of our prospects. Amounts budgeted for each drilling program are subject to change based on a number of factors including, but not limited to, commodity prices, well costs, drilling and completion success, availability of capital and weather-related issues. The Company plans to fund its budget from cash on hand, cash flow from operations, and borrowings under its secured revolving credit facility with Wells Fargo, as warranted.
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