U.S. Energy Corp. (USEG)

[LouisDesyjr]

Sale of Mt. Emmons

The company sold off the project to Mt. Emmons Mining Company (MEM), a subsidiary of Freeport-McMoRan Inc.

Links to SEC documents related to the sales and latest 10Q report are at the bottom of this posting.

USEG ended the quarter 09-30-2015 with equity of $54 million. The sales of the mine caused an impairment (write off) of $22 million, dropping equity to $32 million. Assets were a total of 71 million, less $22 million leaving $49 million. With equity at $32 million, it implies that liabilities would be at $17 million. All of this is before any effect for operations since 09-30-2015.

Operations look like they lost $1.6 million per quarter without the effect of the write off on oil land or depreciation. There were, including February, five months since then, so another $2.6 million was lost, leaving equity of $14.4 million.

I expect oil prices are going to be down the the rest of the year, so another ten months of losses, or $5.2 million, would bring equity to $9.2 million. At the current price of $0.38, the market cap is a little about the expected year end equity of the company.

They should liquidate everything now and pay it out, continuing on is just going to loss everything over the coming months.

Louis J. Desy Jr.



USEG 10Q report for period ending 09-30-2015:
http://ih.advfn.com/p.php?pid=nmona&article=69227037

8K report about $22 million impairment from selling the mine:
http://ih.advfn.com/p.php?pid=nmona&article=70347403

Press release of 02/12/2016 about selling the mine:
http://ih.advfn.com/p.php?pid=nmona&article=70362401

Detailed 8K report about terms of the sale:
http://ih.advfn.com/p.php?pid=nmona&article=70363374