U.S. Energy Corp. Reports 66% Revenue Decline and Increased Net Loss in Q2 2025

U.S. Energy Corp. reported a significant decline in financial performance for the second quarter of 2025, with total revenue falling to $2.03 million, a decrease of 66% from $6.05 million in the same period last year. The company's net loss for the quarter was $6.06 million, compared to a loss of $1.97 million in the prior year. For the first half of 2025, revenue totaled $4.22 million, down 63% from $11.44 million in the first half of 2024, with a net loss of $9.17 million compared to a loss of $11.51 million in the previous year. The decline in revenue was attributed to lower production volumes and reduced commodity prices, particularly in oil and natural gas.

Operationally, U.S. Energy Corp. experienced a 56% decrease in production quantities, producing 48,816 barrels of oil equivalent (BOE) in the second quarter of 2025 compared to 111,091 BOE in the same quarter of 2024. The average sales price for oil also fell by 28% to $55.14 per barrel, while natural gas prices decreased by 17%. The company recorded a ceiling test write-down of $2.8 million for the quarter due to reduced commodity prices, reflecting a broader trend of declining market conditions.

Strategically, U.S. Energy Corp. made notable acquisitions, including the purchase of 24,000 net operated acres in Montana from Synergy Offshore LLC for a total consideration of $4.7 million. This acquisition is part of the company's ongoing efforts to expand its industrial gas properties. Additionally, the company successfully completed an underwritten offering of 4,871,400 shares of common stock, generating approximately $11.9 million in net proceeds, which will be used for the development of its Montana assets and general corporate purposes.

The company also reported a decrease in operating expenses, which totaled $8.27 million for the second quarter, up from $7.76 million in the previous year. This increase was primarily due to higher general and administrative expenses, which rose to $2.25 million, reflecting costs associated with divestitures and acquisition activities. U.S. Energy Corp. continues to manage its liquidity carefully, with cash and equivalents at $6.73 million as of June 30, 2025, down from $7.72 million at the end of 2024.

Looking ahead, U.S. Energy Corp. anticipates further challenges due to ongoing volatility in commodity prices. The company expects to incur additional write-downs in the third quarter of 2025, potentially between $0.5 million and $1.5 million, depending on market conditions. The management plans to focus on strategic acquisitions and partnerships to enhance stockholder value while maintaining a conservative approach to capital expenditures.