US ENERGY CORP
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 12, 2025
BSIN$1.33+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001437749-25-026032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001437749-25-034241
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 101 current paragraphs.
52 unchanged; 40 reworded; 9 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
On September 16, 2025, effective August 1, 2025, the Company entered into a First Amendment to Credit Agreement and Limited Waiver (“Amendment”) with FirstBank, as administrative agent for the lenders party thereto, and such lenders.
Current report
Significant revisions made to the Credit Amendment as a result of the Amendment include extending the maturity date of amounts owed from January 5, 2026 to May 31, 2029, lowering the borrowing base from $20.0 million to $10.0 million, and deferring the next test period for the ratio of total debt to EBITDAX to March 31, 2026. The Company expensed $53 thousand of remaining capitalized deferred financing costs associated with the Credit Agreement during the third quarter of 2025 and capitalized $60 thousand of deferred financing costs attributable to the Amendment.
Current report
Committed Equity Facility
Current report
On October 9, 2025, the Company entered into a Common Stock Purchase Agreement and related Registration Rights Agreement with Roth Principal Investments, LLC (“Roth Principal”), providing a discretionary equity facility of up to $25.0 million. Following SEC effectiveness of a resale registration statement (which the Company does not anticipate being declared effective until the current government shutdown ends), the Company may, at its option over 24 months from the date the resale registration is declared effective and certain other conditions are met, sell shares of common stock to Roth Principal at a price based on the Nasdaq volume weighted average prices during a specific pricing period, less a 2.5% discount, subject to pricing and ownership limits. The equity facility is described in greater detail below under “Liquidity and Capital Resources—Committed Equity Facility”.
Current report
Exploration expense increased$128 thousand, which was attributable to an increase in exploration activities for our industrial gas development. The Company revised the presentation of its statement of operations to separately disclose exploration expense, which was previously included in acquisition related costs in the second quarter. The reclassification was made to enhance comparability and provide greater transparency regarding exploration activities.
Current report
For the nine months ended September 30, 2025, exploration expense increased by $174 thousand due to exploration activities related to industrial gas development. The Company revised the presentation of its statement of operations to separately disclose exploration expense, which was previously included in acquisition related costs in the second quarter. The reclassification was made to enhance comparability and provide greater transparency regarding exploration activities.
Current report
On September 16, 2025, effective August 1, 2025, the Company entered into a First Amendment to Credit Agreement and Limited Waiver with FirstBank. Significant revisions made to the Credit Amendment as a result of the Amendment include extending the maturity date of amounts owed from January 5, 2026 to May 31, 2029, lowering the borrowing base from $20.0 million to $10.0 million and deferring the next test period for the ratio of total debt to EBITDAX to March 31, 2026. The Company expensed $53 thousand of remaining capitalized deferred financing costs associated with the Credit Agreement during the third quarter of 2025 and capitalized $60 thousand of deferred financing costs attributable to the Amendment.
Current report
Committed Equity Facility
Current report
On October 9, 2025, the Company entered into a Common Stock Purchase Agreement and related Registration Rights Agreement with Roth Principal Investments, LLC, providing a discretionary equity facility of up to $25.0 million. Following SEC effectiveness of a resale registration statement (which the Company does not anticipate being declared effective until the current government shutdown ends), the Company may, at its option over 24 months from the date the resale registration is declared effective and certain other conditions are met, sell shares of common stock to Roth Principal at a price based on the Nasdaq volume weighted average prices during a specific pricing period, less a 2.5% discount, subject to pricing and ownership limits. The facility is capped at 19.99% of outstanding shares of the Company’s common stock as of the date of the Company’s entry into the Common Stock Purchase Agreement, absent shareholder approval or satisfaction of the Nasdaq pricing exemption and includes a 4.99% beneficial-ownership blocker. As consideration, the Company paid a $25 thousand structuring fee, issued 223,141 shares of common stock as a partial commitment fee (valued at $270,000)(the “Stock Commitment Fee”), agreed to a $180 thousand cash commitment fee, and to reimburse legal fees. Proceeds, if any, are expected to be used for working capital and general corporate purposes. Under the Purchase Agreement, the Company may be required to make a cash “make-whole” payment of up to $270,000 (the value of the Stock Commitment Fee”) if, under certain conditions, Roth Principal receives less than $270,000 in total cash proceeds from the resale of such shares before certain specified dates. In such a case, Roth Principal would return to the Company for cancellation any unsold commitment shares.
Removed paragraphs (1)
Previous report
Effective August 1, 2025, the Company has agreed to an amended Credit Agreement with First Bank Southwest with a borrowing base of $10.0 million with a maturity date of May 31, 2029. The amended agreement is subject to customary closing activities, we anticipate executing the agreement in the third quarter of 2025.
Reworded paragraphs (40)
Previous wording
On January 7, 2025, we entered into and simultaneously closed the transactions contemplated by, a purchase and sale agreement, with Synergy Offshore LLC (“Synergy”). Synergy is controlled by Mr. Duane H. King, a member of the Board of Directors of the Company, who serves as the Chief Executive Officer and Manager of Synergy, and John A. Weinzierl, the Company’s Chairman, who is an approximate sixty percent beneficial owner of Synergy.
Current wording
On January 7, 2025, we entered into and simultaneously closed the transactions contemplated by, a purchase and sale agreement, with Synergy Offshore LLC (“Synergy”). Synergy is controlled by Mr. Duane H. King, a member of the Board of Directors of the Company, who serves as the Chief Executive Officer and Manager of Synergy, and John A. Weinzierl, the Company’s Chairman, who was an approximate sixty percent beneficial owner of Synergy at the time of the entry into the purchase and sale agreement.
Previous wording
During the six months ended June 30, 2025, the Company repurchased 197,400 shares for $317 thousand, at a weighted average price of $ 1.61 per share. During the six months ended June 30, 2024, the Company repurchased 463,500 shares for $505 thousand at a weighted average price of $ 1.09 per share. As of June 30, 2025, a total of $3.5 million remained available under the repurchase program for future repurchases.
Current wording
During the nine months ended September 30, 2025, the Company repurchased 197,400 shares for $317 thousand, at a weighted average price of $1.61 per share. During the nine months ended September 30, 2024, the Company repurchased 482,500 shares for $525 thousand at a weighted average price of $1.09 per share. There were no repurchases during the three months ended September 30, 2025. As of September 30, 2025, a total of $3.5 million remained available under the repurchase program for future repurchases.
Previous wording
During the second quarter of 2025, the Company drilled 2 new industrial gas wells on our Kevin Dome acreage in Montana. Both wells are currently being assessed, and completion work is ongoing. In addition, we successfully completed the discovery well we acquired in the Synergy transaction noted above. The Company continues to refine its development plan. These activities include evaluating initial plant designs and processing plant locations, designing our gathering system, finalizing permitting for injection wells and attaining right of ways among other activities in anticipation of first production of our industrial gas wells in 2026.
Current wording
During the first half of 2025, the Company drilled 2 new industrial gas wells on our Kevin Dome acreage in Montana. Both wells are currently being assessed, and completion work is ongoing. In addition, we successfully completed the discovery well we acquired in the Synergy transaction noted above. The Company continues to refine its development plan. These activities include evaluating initial plant designs and processing plant locations, designing our gathering system, finalizing permitting for injection wells and attaining right of ways among other activities in anticipation of first production of our industrial gas wells in 2026.
Previous wording
The reserves used in the ceiling test incorporate assumptions regarding pricing and discount rates over which management has no influence in the determination of present value. In the calculation of the ceiling test as of June 30, 2025, the Company used $70.48 per barrel for oil and $2.86 per one million British Thermal Units (MMbtu) for natural gas (as further adjusted for property, specific gravity, quality, local markets and distance from markets) to compute the future cash flows of the Company’s producing properties. The discount factor used was 10%. The Company recorded a $2.8 million ceiling test write-down of its oil and natural gas properties during the three months ended June 30, 2025, due to a reduction in the value of proved oil and natural gas reserves primarily as a result of a decrease in crude oil prices.
Current wording
The reserves used in the ceiling test incorporate assumptions regarding pricing and discount rates over which management has no influence in the determination of present value. In the calculation of the ceiling test as of September 30, 2025, the Company used $67.45 per barrel for oil and $3.10 per one million British Thermal Units (MMbtu) for natural gas (as further adjusted for property, specific gravity, quality, local markets and distance from markets) to compute the future cash flows of the Company’s producing properties. The discount factor used was 10%. The Company recorded a $0.9 million ceiling test write-down of its oil and natural gas properties during the three months ended September 30, 2025, due to a reduction in the value of proved oil and natural gas reserves primarily as a result of a decrease in crude oil prices.
Previous wording
We expect to record a further write-down of our oil and natural gas properties in the third quarter of 2025 due to lower commodity prices used in the calculation of the ceiling test. Depending on actual commodity prices, estimated price differentials, lease operating costs, revisions to reserve estimates, and the amount and timing of capital expenditures, the write-down could be approximately $0.5 million to $1.5 million in the third quarter of 2025.
Current wording
We expect to record a further write-down of our oil and natural gas properties in the fourth quarter of 2025 due to lower commodity prices used in the calculation of the ceiling test. Depending on actual commodity prices, estimated price differentials, lease operating costs, revisions to reserve estimates, and the amount and timing of capital expenditures, the write-down could be approximately$0.8 million to$1.8 million in the fourth quarter of 2025.
Previous wording
During the remainder of 2025 and beyond, we intend to seek additional opportunities in the oil, natural gas and industrial gas sectors, including but not limited to further acquisition of assets, participation with industry partners in exploration and development projects, acquisition of existing companies, and the purchase of other industrial gas assets.
Current wording
During the remainder of 2025 and beyond, we intend to seek additional opportunities in the oil, natural gas and industrial gas sectors, including but not limited to, further acquisition of assets, participation with industry partners in exploration and development projects, acquisition of existing companies, and the purchase of other industrial gas assets. This includes contracting for the off and on-site construction of our processing facility, negotiating off take and other operating arrangements, and finalizing gathering design and other infrastructure needs.
Previous wording
For the three months ended June 30, 2025, we recorded a net loss of $6.1 million, which was primarily due to declining commodity prices and lower production, resulting in reduced revenue for the period, which was also affected by property divestitures. In the following sections, we discuss our revenue, operating expenses, and other income (expense) for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Current wording
For the three months ended September 30, 2025, we recorded a net loss of $3.3 million, which was primarily due to declining commodity prices and lower production, resulting in reduced revenue for the period, which was also affected by property divestitures which occurred after the fourth quarter of 2023. In the following sections, we discuss our revenue, operating expenses, and other income (expense) for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
Previous wording
The decrease in our oil and natural gas revenue of $4.0 million for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, was primarily due to a decrease of 56% in production quantities and a decrease in realized commodity pricing of 24% on a per barrel of oil equivalent (BOE) basis. For the three months ended June 30, 2025, we produced 48,816 BOE, or an average of 536 BOE per day, as compared to 111,091 BOE or an average of 1,221 BOE per day during the comparable period in 2024. The decrease in our production quantities primarily relates to the divestitures of our properties in the Karnes County, East Texas and Mid-con regions which occurred in the second half of 2024 and the natural decline in production in remaining producing assets. During the three months ended June 30, 2025, our production was 69% oil and 31% natural gas and liquids compared to 64% oil and 36% natural gas and liquids produced during the three months ended June 30, 2024.
Current wording
The decrease in our oil and natural gas revenue of $3.2 million for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, was primarily due to a decrease of 67% in production quantities, offset by an increase in realized commodity pricing of 5% on a per barrel of oil equivalent (BOE) basis. For the three months ended September 30, 2025, we produced 35,326 BOE, or an average of 384 BOE per day, as compared to 105,699 BOE or an average of 1,149 BOE per day during the comparable period in 2024. The decrease in our production quantities primarily relates to the divestitures of our properties in the Karnes County, East Texas and Mid-con regions which closed during the first eight months of 2024 and the natural decline in production in remaining producing assets. During the three months ended September 30, 2025, our production was 75% oil and 25% natural gas and liquids compared to 58% oil and 42% natural gas and liquids produced during the three months ended September 30, 2024.
Previous wording
For the three months ended June 30, 2025, lease operating expenses were $1.6 million or $32.14 per BOE. While lease operating expenses decreased by $1.5 million when compared to $3.1 million or $27.69 per BOE for the three months ended June 30, 2024, the cost on a BOE basis increased as the mix of properties changed because of the divestment of our Karnes County, East Texas, and Mid-con properties.
Current wording
For the three months ended September 30, 2025, lease operating expenses were $1.0 million or $29.36 per BOE. While lease operating expenses decreased by $2.0 million when compared to $3.1 million or $28.95 per BOE for the three months ended September 30, 2024, the cost on a BOE basis increased as the mix of properties changed because of the divestment of our Karnes County, East Texas, and Mid-con properties.
Previous wording
For the three months ended June 30, 2025, production taxes consistently remain between 6% and 7% of revenue. This decrease in production taxes was attributable to the decrease in revenue of 66% discussed above.
Current wording
For the three months ended September 30, 2025, production taxes consistently remain between 6% and 8% of revenue. This decrease in production taxes was attributable to the decrease in revenue of 65% discussed above.
Previous wording
*Depreciation, Depletion and Amortization.*Our depreciation, depletion, and amortization (“DD&A”) was $1.1 million and $2.2 million for the three months ended June 30, 2025 and 2024, respectively. Depletion expense on our oil and natural gas properties is the primary driver of DD&A expense. Our depletion rate was $15.37 per BOE and $15.30 per BOE for the three months ended June 30, 2025 and 2024, respectively. Our depletion rate can fluctuate because of acquisitions, changes in drilling and completion costs, impairments, revisions in asset retirement obligation cost estimates or timing, divestitures, changes in the mix of our production, the underlying proved reserve volumes and estimated future development costs.
Current wording
*Depreciation, Depletion and Amortization.*Our depreciation, depletion, and amortization (“DD&A”) was $0.8 million and $2.0 million for the three months ended September 30, 2025 and 2024, respectively. Depletion expense on our oil and natural gas properties is the primary driver of DD&A expense. Our depletion rate was $14.19 per BOE and $14.94 per BOE for the three months ended September 30, 2025 and 2024, respectively. Our depletion rate can fluctuate modestly because of acquisitions, changes in drilling and completion costs, impairments, revisions in asset retirement obligation cost estimates or timing, divestitures, changes in the mix of our production, the underlying proved reserve volumes and estimated future development costs.
Previous wording
Impairment of oil and natural gas properties. The Company recorded a ceiling test write down of $2.8 million for the three months ended June 30, 2025, resulting from a reduction in commodity prices in the second quarter. The Company recorded a $5.4 million ceiling test write-down of its oil and gas properties during the three months ended June 30, 2024, due to a reduction in the value of proved oil and natural gas reserves. The reduction was primarily due to lower commodity prices used in the full cost pool ceiling test, as well as reserves revisions related to wells shut-in during the first quarter of 2024 and updates to the decline curves for certain wells.
Current wording
Impairment of oil and natural gas properties. The Company recorded a $0.9 million ceiling test write down for the three months ended September 30, 2025, resulting from a reduction in commodity prices used in the full cost pool ceiling test from the second quarter. The Company recorded a $1.4 million ceiling test write-down of its oil and gas properties during the three months ended September 30, 2024, due to a reduction in the value of proved oil and natural gas reserves. The reduction was primarily due to lower commodity prices used in the full cost pool ceiling test, as well as reserves revisions related to wells shut-in during the first quarter of 2024 and updates to the decline curves for certain wells.
Previous wording
General and administrative expenses increased by $0.3 million for the six months ended June 30, 2025 as compared to the prior year period. The increase was primarily attributable to an increase in both professional fees primarily attributable to divestitures, and acquisition related activities as well as incremental costs associated with a partial outsourcing of our accounting function to a third-party provider including transition costs offset by a decrease in compensation and benefits. Stock-based compensation was higher because of the value of the restricted stock awards being amortized for the six months ended June 30, 2025 than those being amortized during the six months ended June 30, 2024.
Current wording
General and administrative expenses decreased by $0.1 million for the three months ended September 30, 2025 as compared to the prior year period. The decrease was primarily attributable to a reduction in acquisition-related costs offset by increases in legal and professional fees, outsourcing of our accounting function compensation, and stock-based compensation. Stock-based compensation was higher because of the value of the restricted stock awards being amortized for the three months ended September 30, 2025, than those being amortized during the three months ended September 30, 2024.
Previous wording
For the three months ended June 30, 2025, we did not have any open commodity derivative positions. For the first three months of 2024, we recognized losses on commodity derivative contracts of $1.4 million, primarily as the result of a decrease in the fair value of our outstanding commodity derivative contracts from settlements of open positions and higher WTI prices.
Current wording
For the three months ended September 30, 2025, we did not have any open commodity derivative positions. For the three months ended September 30, 2024, we recognized a gain on commodity derivative contracts of $2.0 million, primarily as the result of the settlement in September 2024 of all of our remaining commodity derivative contracts for $1.8 million.
Previous wording
Interest expense primarily represents the interest and fees on our credit facility with FirstBank Southwest. As of December 31, 2024 and June 30, 2025, we had no amounts outstanding on our credit facility. For the three months ended June 30, 2025, while there was no balance outstanding on the credit facility, we did incur fees to maintain our credit facility.
Current wording
Interest expense primarily represents the interest and fees on our credit facility with FirstBank Southwest. As of December 31, 2024 and September 30, 2025, we had no outstanding amounts on our credit facility. For the three months ended September 30, 2025, while there was no balance outstanding on the credit facility, we did incur fees to maintain our credit facility and expensed our prior deferred financing costs upon amending our credit facility in September 2025, as discussed above.
Previous wording
Comparison of our Statements of Operations for the Six Months Ended June 30, 2025 and 2024
Current wording
Comparison of our Statements of Operations for the Nine Months Ended September 30, 2025 and 2024
Previous wording
For the six months ended June 30, 2025, we recorded a net loss of $9.2 million which was primarily due to declining commodity prices and lower production, resulting in reduced revenue for the period, which was also affected by property sales. In the following sections, we discuss our revenue, operating expenses, and other income (expense) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, we recorded a net loss of $12.5 million which was primarily due to declining commodity prices and lower production, resulting in reduced revenue for the period, which was also affected by property sales. In the following sections, we discuss our revenue, operating expenses, and other income (expense) for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous wording
*Revenue.*Presented below is a comparison of our oil and natural gas sales, production quantities and average sales prices for the six months ended June 30, 2025 and 2024:
Current wording
*Revenue.*Presented below is a comparison of our oil and natural gas sales, production quantities and average sales prices for the nine months ended September 30, 2025 and 2024:
Previous wording
The decrease in our oil and natural gas revenue of $7.2 million for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to a decrease of 56% in production quantities and a decrease in realized commodity pricing of 15% on a per barrel of oil equivalent (BOE) basis. For the six months ended June 30, 2025, we produced 95,824 BOE, or an average of 529 BOE per day, as compared to 220,890 BOE or an average of 1,214 BOE per day during the comparable period in 2024. The decrease in our production quantities primarily relates to the divestitures of our Karnes County, East Texas and Mid-con regions properties, which occurred in second half of 2024 and the natural decline in production in remaining producing assets. During the six months ended June 30, 2025, our production was 66% oil and 34% natural gas and liquids compared to 63% oil and 37% natural gas and liquids produced during the six months ended June 30, 2024.
Current wording
The decrease in our oil and natural gas revenue of $10.4 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to a decrease of 60% in production quantities and a decrease in realized commodity pricing of 9% on a per barrel of oil equivalent (BOE) basis. For the nine months ended September 30, 2025, we produced 131,150 BOE, or an average of 480 BOE per day, as compared to 326,589 BOE or an average of 1,192 BOE per day during the comparable period in 2024. The decrease in our production quantities primarily relates to the divestitures of our Karnes County, East Texas and Mid-con regions properties, which occurred in the second half of 2024 and the natural decline in production in remaining producing assets. During the nine months ended September 30, 2025, our production was 68% oil and 32% natural gas and liquids compared to 62% oil and 38% natural gas and liquids produced during the nine months ended September 30, 2024.
Previous wording
Oil and Natural Gas Production Costs. Presented below is a comparison of our oil and natural gas production costs for the six months ended June 30, 2025 and 2024:
Current wording
Oil and Natural Gas Production Costs. Presented below is a comparison of our oil and natural gas production costs for the nine months ended September 30, 2025 and 2024:
Previous wording
For the six months ended June 30, 2025, lease operating expenses were $3.2 million or $33.16 per BOE. While lease operating expenses decreased by $3.1 million when compared to the $6.3 million or $28.35 per BOE for the six months ended June 30, 2024, the cost on a BOE basis increased as the mix of properties changed because of the divestment of our Karnes County, East Texas, and Mid-con properties.
Current wording
For the nine months ended September 30, 2025, lease operating expenses were $4.2 million or $31.74 per BOE. While lease operating expenses decreased by $5.2 million when compared to the $9.3 million or $28.54 per BOE for the nine months ended September 30, 2024, the cost on a BOE basis increased as the mix of properties changed because of the divestment of our Karnes County, East Texas, and Mid-con properties.
Previous wording
For the six months ended June 30, 2025, the gathering, transportation, and treating expense decrease was attributable to the divestiture of properties that included gathering and transportation costs in the second half of 2024.
Current wording
For the nine months ended September 30, 2025, the gathering, transportation, and treating expense decrease was attributable to the divestiture of properties that included gathering and transportation costs in the second half of 2024.
Previous wording
For the six months ended June 30, 2025, production taxes consistently remain between 6% and 7% of revenue. This decrease in production taxes was attributable to the decrease in revenue of 63% discussed above.
Current wording
For the nine months ended September 30, 2025, production taxes consistently remain between 6% and 7% of revenue. This decrease in production taxes was attributable to the decrease in revenue of 64% discussed above.
Previous wording
*Depreciation, Depletion and Amortization.*Our depreciation, depletion, and amortization (“DD&A”) was $2.2 million and $4.4 million for the six months ended June 30, 2025 and 2024, respectively. Depletion expense on our oil and natural gas properties is the primary driver of DD&A expense. Our depletion rate was $14.38 per BOE and $15.60 per BOE for the six months ended June 30, 2025 and 2024, respectively. Our depletion rate can fluctuate because of acquisitions, changes in drilling and completion costs, impairments, revisions in asset retirement obligation cost estimates or timing, divestitures, changes in the mix of our production, the underlying proved reserve volumes and estimated future development costs.
Current wording
*Depreciation, Depletion and Amortization.*Our depreciation, depletion, and amortization (“DD&A”) was $3.1 million and $6.4 million for the nine months ended September 30, 2025 and 2024, respectively. Depletion expense on our oil and natural gas properties is the primary driver of DD&A expense. Our depletion rate was $14.54 per BOE and $15.39 per BOE for the nine months ended September 30, 2025 and 2024, respectively. Our depletion rate can fluctuate because of acquisitions, changes in drilling and completion costs, impairments, revisions in asset retirement obligation cost estimates or timing, divestitures, changes in the mix of our production, the underlying proved reserve volumes and estimated future development costs.
Previous wording
Impairment of oil and natural gas properties. The Company recorded a ceiling test write down of $2.8 million for the six months ended June 30, 2025, resulting from a decrease in commodity prices. The Company recorded a $5.4 million ceiling test write-down of its oil and gas properties during the six months ended June 30, 2024, due to a reduction in the value of proved oil and natural gas reserves. The reduction was primarily due to lower commodity prices used in the full cost pool ceiling test, as well as reserves revisions related to wells shut-in during the first quarter of 2024 and updates to the decline curves for certain wells.
Current wording
Impairment of oil and natural gas properties. The Company recorded a ceiling test write down of $3.6 million for the nine months ended September 30, 2025, resulting from a decrease in commodity prices used in the full cost pool ceiling test calculation. The Company recorded a $6.8 million ceiling test write-down of its oil and gas properties during the nine months ended September 30, 2024, due to a reduction in the value of proved oil and natural gas reserves. The reduction was primarily due to lower commodity prices used in the full cost pool ceiling test, as well as reserves revisions related to wells shut-in during the first quarter of 2024 and updates to the decline curves for certain wells.
Previous wording
*General and Administrative Expenses.*Presented below is a comparison of our general and administrative expenses for the six months ended June 30, 2025 and 2024:
Current wording
*General and Administrative Expenses.*Presented below is a comparison of our general and administrative expenses for the nine months ended September 30, 2025 and 2024:
Previous wording
General and administrative expenses increased by $0.2 million for the three months ended June 30, 2025 as compared to the prior year period. The increase was primarily attributable to an increase in both professional fees primarily attributable to divestitures, and acquisition related activities as well as incremental costs associated with a partial outsourcing of our accounting function to a third-party provider including transition costs offset by compensation and benefits. Stock-based compensation was higher because of the value of the restricted stock awards being amortized for the three months ended June 30, 2025, than those being amortized during the three months ended June 30, 2024.
Current wording
General and administrative expenses increased by $0.2 million for the nine months ended September 30, 2025 as compared to the prior year period. The increase was primarily attributable to an increase in both professional fees, outsourcing of our accounting function, and stock-based compensation offset by a reduction in acquisition related costs. Stock-based compensation was higher because of the value of the restricted stock awards being amortized for the nine months ended September 30, 2025 than those being amortized during the nine months ended September 30, 2024.
Previous wording
Other Income (Expense). Presented below is a comparison of our other income (expense) for the six months ended June 30, 2025 and 2024:
Current wording
Other Income (Expense). Presented below is a comparison of our other income (expense) for the nine months ended September 30, 2025 and 2024:
Previous wording
For the six months ended June 30, 2025, we did not have any open commodity derivative positions. For the six months ended June 30, 2024, we recognized losses on commodity derivative contracts of $1.4 million, primarily as the result of a decrease in the fair value of our outstanding commodity derivative contracts from settlements of open positions and higher WTI prices.
Current wording
For the nine months ended September 30, 2025, we did not have any open commodity derivative positions. For the nine months ended September 30, 2024, we recognized gains on commodity derivative contracts of $0.5 million, primarily as the result of the settlement in September 2024 of all our remaining commodity derivative contracts for $1.8 million.
Previous wording
Interest expense primarily represents the interest and fees on our credit facility with FirstBank Southwest. As of December 31, 2024 and June 30, 2025, we had no amounts outstanding on our credit facility. For the six months ended June 30, 2025, while there was no balance outstanding on the credit facility, we did incur fees to maintain our credit facility. Other income (expense), net primarily represents interest income on the Company's cash balance and changes in the fair value of our marketable equity securities.
Current wording
Interest expense primarily represents the interest and fees on our credit facility with FirstBank Southwest. As of December 31, 2024 and September 30, 2025, we had no amounts outstanding on our credit facility. For the nine months ended September 30, 2025, while there was no balance outstanding on the credit facility, we did incur fees to maintain our credit facility and expensed fees associated with our third quarter credit facility Amendment, discussed above. Other income (expense), net primarily represents interest income on the Company's cash balance and changes in the fair value of our marketable equity securities.
Previous wording
During the second quarter of 2025, we entered into a negotiated post-closing cash settlement and recognized an additional loss of $424 thousand on our $6.825 million divestment in Henderson, Anderson, Liberty and Chambers County, Texas that closed on December 31, 2024. The Company also closed on the sale of a portion of our operated Wyoming properties for approximately $500 thousand during the second quarter of 2025. Proceeds from the Wyoming divestiture were recorded as an adjustment to the full cost pool with no gain or loss recognized in the Statements of Operations.
Current wording
During the first half of 2025, we entered into a negotiated post-closing cash settlement and recognized an additional loss of $424 thousand on our $6.825 million divestment in Henderson, Anderson, Liberty and Chambers County, Texas that closed on December 31, 2024. The Company also closed on the sale of a portion of our operated Wyoming properties for approximately $500 thousand during this time. Proceeds from the Wyoming divestiture were recorded as an adjustment to the full cost pool with no gain or loss recognized in the Statements of Operations.
Previous wording
For the remainder of 2025, we anticipate our industrial gas development cost to total between $1.0 to $2.5 million, representing funds required to complete our recently drilled industrial gas wells, and onsite and preliminary design for our anticipated industrial gas processing plant and related infrastructure. The total costs depend primarily on the timing of these activities. The extent of capital deployment over the next 12 months will depend largely on the timing of the construction of our industrial gas processing plant. In addition, depending on timing, regulatory requirements and weather, we may incur costs for plugging and abandonment of oil and natural gas wells of up to $ 800 thousand. We view much of these capital activities as discretionary for which we can control both the timing and amount of the expenditures. Other activities, such as some repairs and maintenance may be required from time to time by regulatory bodies. We anticipate our expenditures will be funded primarily by cash on hand, operating cash flows, proceeds from divestitures of oil and natural gas properties, and if necessary, borrowings under our credit facility and project specific financing. In the event that readily available sources of cash flow are insufficient to fund our capital needs, we may utilize equity and credit markets as a funding mechanism.
Current wording
For the remainder of 2025, we anticipate our industrial gas development cost to be less than $1.0 million, representing funds required to complete our recently drilled industrial gas wells, and onsite and preliminary design for our anticipated industrial gas processing plant and related infrastructure. The timing of initial plant construction expenditures is being impacted by the U.S. federal government shutdown, which impacts our ability to access capital markets. The extent of capital deployment over the next 12 months will depend largely on the timing of the construction of our industrial gas processing plant. In addition, depending on timing, regulatory requirements and weather, we may incur costs for plugging and abandonment of oil and natural gas wells of up to $300 thousand. We view much of these capital activities as discretionary for which we can control both the timing and amount of the expenditures. Other activities, such as some repairs and maintenance may be required from time to time by regulatory bodies. We anticipate our expenditures will be funded primarily by cash on hand, operating cash flows, proceeds from divestitures of oil and natural gas properties, borrowings under our credit facility, sales of equity under our purchase agreement with Roth Principal, and project specific financing including equity and credit markets.
Previous wording
For the six months ended June 30, 2025, we funded our capital expenditures with cash on hand and proceeds from our January 2025 equity offering. In January 2025, we raised $11.9 million ($10.3 million after the repurchase of certain shares of common stock held by affiliates of Sage Road Capital, which entities are related parties (see alsoMaterial Developments-Related Party Share Repurchase, above, and related issuance costs)) in an underwritten offering of 4,871,400 shares of our common stock. In future quarters, if cash flows are not sufficient to fund our capital expenditures and operations, we may raise funds through additional equity offerings (public and/or private) or from other sources of financing. We also may re-evaluate our capital spend program as economic conditions warrant. Additionally, we may enter into carrying cost and sharing arrangements with third parties for certain development programs. All of our sources of liquidity can be affected by the changes in economic conditions, rising interest rates, changes in debt and equity markets, force majeure events, fluctuations in commodity prices, operating costs, tax law changes, and volumes produced, all of which would affect us and our industry.
Current wording
For the nine months ended September 30, 2025, we funded our capital expenditures with cash on hand and proceeds from our January 2025 equity offering. In January 2025, we raised $11.9 million ($10.3 million after the repurchase of certain shares of common stock held by affiliates of Sage Road Capital, which entities are related parties (see alsoMaterial Developments-Related Party Share Repurchase, above, and related issuance costs)) in an underwritten offering of 4,871,400 shares of our common stock. In future quarters, if cash flows are not sufficient to fund our capital expenditures and operations, we may raise funds through additional equity offerings (public and/or private), including sales of equity under our purchase agreement with Roth Principal, or from other sources of financing. We also may re-evaluate our capital spend program as economic conditions warrant. Additionally, we may enter into carrying cost and sharing arrangements with third parties for certain development programs. All of our sources of liquidity can be affected by the changes in economic conditions, rising interest rates, changes in debt and equity markets, force majeure events, fluctuations in commodity prices, operating costs, tax law changes, and volumes produced, all of which would affect us and our industry.
Previous wording
On January 5, 2022, we entered into a four-year credit agreement with FirstBank Southwest as administrative agent, which provides for a revolving line of credit with a borrowing base of $20 million, and a maximum credit amount of $100 million (the “Credit Agreement”). Under the Credit Agreement, revolving loans may be borrowed, repaid and re-borrowed until January 5, 2026, when all outstanding amounts must be repaid. The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. In addition, the Credit Agreement contains financial covenants, tested quarterly, that limit our ratio of total debt to EBITDAX (as defined in the Credit Agreement) to 3:1 and require our ratio of consolidated current assets to consolidated current liabilities (as each is described in the Credit Agreement) to remain at 1:1 or higher. We were in compliance with all financial covenants as of June 30, 2025.
Current wording
On January 5, 2022, we entered into a four-year credit agreement with FirstBank Southwest as administrative agent, which provides for a revolving line of credit with a borrowing base of $10 million, and a maximum credit amount of $100 million (the “Credit Agreement”). Under the Credit Agreement, revolving loans may be borrowed, repaid and re-borrowed until January 5, 2026, when all outstanding amounts must be repaid. The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. In addition, the Credit Agreement contains financial covenants, tested quarterly, that limit our ratio of total debt to EBITDAX (as defined in the Credit Agreement) to 3:1 and require our ratio of consolidated current assets to consolidated current liabilities (as each is described in the Credit Agreement) to remain at 1:1 or higher.
Previous wording
We use cash for the acquisition and development of industrial gas and oil and gas properties, workovers and capital expenditures, operating and general and administrative costs, settlements of commodity derivative contracts, debt obligations including interest, and share repurchases. During the six months ended June 30, 2025, we spent approximately $4.7 million on the acquisition and development of industrial gas properties and capital expenditures.
Current wording
We use cash for the acquisition and development of industrial gas and oil and gas properties, workovers and capital expenditures, operating and general and administrative costs, settlements of commodity derivative contracts, debt obligations including interest, and share repurchases. During thenine months ended September 30, 2025, we spent approximately$9.8 million on the acquisition and development of industrial gas properties and capital expenditures.
Previous wording
The amount and allocation of our future capital expenditures will depend upon a number of factors, including our cash flows from operating, investing, and financing activities, our ability to execute our development program, and the number and size of acquisitions that we complete. In addition, the impact of industrial gas and oil and natural gas prices on investment opportunities, the availability of capital, tax law changes, and the timing and results of our development activities may lead to changes in funding requirements for future development. We periodically review our capital expenditure budget to assess if changes are necessary based on current and projected cash flows, acquisition and divestiture activities, and other factors. We will continue to monitor the economic environment through the remainder of the year and adjust our activity level as warranted.
Current wording
The amount of our future capital expenditures will depend upon a number of factors, including our cash flows from operating, investing, and financing activities, the ongoing government shutdown, our ability to execute our development program, the number and size of acquisitions that we complete and the timing of initial plant construction expenditures. In addition, the impact of industrial gas and oil and natural gas prices on investment opportunities, the availability of capital, tax law changes, and the timing and results of our development activities may lead to changes in funding requirements for future development. We periodically review our capital expenditure budget to assess if changes are necessary based on current and projected cash flows, acquisition and divestiture activities, and other factors. We will continue to monitor the economic environment through the remainder of the year and adjust our activity level as warranted.
Previous wording
The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024:
Current wording
The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024:
Previous wording
Operating Activities. Cash used in operating activities of $6.1 million for the six months ended June 30, 2025 was mainly due to a $9.2 million net loss and a reduction of accounts payable and accrued liabilities of $3.0 million, offset by $2.2 million of depreciation, depletion, accretion, and amortization and a $3.2 million impairment of oil and natural gas properties and loss on sale of assets. Cash used in operating activities of $0.3 million for the six months ended June 30, 2024, was mainly due to of net loss of $11.5 million, offset by $4.4 million of depreciation, depletion, accretion, and amortization and a $5.4 million impairment of oil and natural gas properties.
Current wording
Operating Activities. Cash used in operating activities of $6.3 million for the nine months ended September 30, 2025 was mainly due to a $12.5 million net loss and a reduction of working capital of $2.4 million, offset by$3.1 million of depreciation, depletion, accretion, and amortization, a $3.6 million impairment of oil and natural gas properties and $1.5 million in stock-based compensation. Cash provided by operating activities of $2.9 million for the nine months ended September 30, 2024, was mainly due to a net loss of $13.8 million, offset by $6.4 million of depreciation, depletion, accretion, and amortization, a $6.8 million impairment of oil and natural gas properties and a $2.4 million commodity derivative cash settlement.
Previous wording
Investing Activities. Cash used in investing activities for the six months ended June 30, 2025 was $4.5 million as compared to cash used in investing activities of $2.7 million for the comparable period in 2024. The primary use of cash in our investing activities for the six months ended June 30, 2025 was attributable to the Synergy acquisition noted above inMaterial Developments - Synergy - acquisition of industrial gas propertiesand recent drilling activity*.*For the six months ended June 30, 2024, the primary use of cash in our investing activities related to the Wavetech acquisition and returning idle wells to production and improvements to our gathering system in East Texas.
Current wording
Investing Activities. Cash used in investing activities for the nine months ended September 30, 2025 was $9.7 million as compared to cash provided by investing activities of $0.7 million for the comparable period in 2024. The primary use of cash in our investing activities for the nine months ended September 30, 2025 was attributable to the Synergy acquisition noted above inMaterial Developments - Synergy - acquisition of industrial gas propertiesand recent drilling activity*.*For the nine months ended September 30, 2024, cash provided by our investing activities related to proceeds received from the divestiture of oil and gas properties, offset by the June 2024 acquisition by the Company of certain properties located in Toole County, Montana from Wavetech Helium, Inc. and capital expenditures.
Previous wording
Financing Activities. Cash provided by financing activities for the six months ended June 30, 2025 was $9.6 million as compared to cash used in financing activities of $1.2 million for the comparable period in 2024. As discussed inMaterial Developments - Underwritten Offering above, the primary driver of finance cash inflow during the first half of 2025 was our first quarter equity offering which generated net proceeds of $11.9 million offset by a share repurchases. Cash provided by financing activities during the six months ended June 30, 2024 primarily related to borrowings under our credit facility reduced by share repurchases of $0.6 million and tax withholdings related to share based compensation.
Current wording
Financing Activities. Cash provided by financing activities for the nine months ended September 30, 2025 was $9.6 million as compared to cash used in financing activities of $5.8 million for the comparable period in 2024. As discussed inMaterial Developments - Underwritten Offering above, the primary driver of finance cash inflow during the nine months ended September 30, 2025, was our first quarter equity offering which generated net proceeds of $11.9 million, offset by share repurchases. The primary use of cash in our financing activities during the nine months ended September 30, 2024 related to net repayments under our credit facility of $5.0 million, share repurchases, and tax withholdings related to share based compensation of $0.7 million.