US Energy Corp Q4 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Charles Meade - Johnson Rice - Analyst : Good morning, Ryan to you and the whole USEG team.

Question: Charles Meade - Johnson Rice - Analyst : Ryan, in your prepared comments, I want to go back and make sure I heard you correctly, and I'm interpreting it the right way. I think I heard you say, or I seem to recall you saying that you feel like you have investment opportunities or growth opportunities or growth initiatives inside your portfolio that are better -- that are higher returns than any outside M&A opportunities. Was that -- did I hear and interpret that correctly? And I wonder if you can elaborate to the extent that you're able to right now, what those growth initiatives -- kind of organic growth initiatives are?

Question: Charles Meade - Johnson Rice - Analyst : Got it. Well, look, $80-plus oil, a lot of stuff will work. And Ryan, I wondered just -- you've made a lot of comments about the A&D market. I just wonder can we go at that directly. From my seat, the big deals, equity to equity are still happening, but kind of the cash deals in the A&D seemed to have slowed down mostly because there's -- it looks like there's no -- the sellers -- buyers have moved down what they're willing to pay and sellers haven't. I'm curious, is that the way it seems to you? Or maybe just elaborate a little bit more on the character of the -- of the kind of the smaller scale A&D opportunity set right now?

Question: Charles Meade - Johnson Rice - Analyst : Thank you for all that added detail, Ryan.

Question: Tim Moore - EF Hutton - Analyst : Thanks. We really appreciate that asset growth initiatives color as you wrap up the optimization effort there and geographically, it makes sense why that would take so long. But any other comments maybe you can give us for sneak peak on a strategic alternatives over your commentary, Ryan, and we assume they're going to be mostly oil-weighted assets?

Question: Tim Moore - EF Hutton - Analyst : Good, that's helpful. Now we're looking forward to more on that front. Yes, for lease operating expenses, that decreased nicely, as you mentioned, to $22 Boe, averaged something like $25 in the first nine months of a year, how much lower do you think you can squeeze that out? Is there more potential there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2024 / 1:00PM, USEG.OQ - Q4 2023 US Energy Corp Earnings Call

Question: Tim Moore - EF Hutton - Analyst : Thanks for being candid on that. Yeah, you made some great progress. And so Ryan and Mark, I know you don't give guidance, but in theory, if crude oil prices stayed above $70 for the rest of the year, what type of production growth do you think you could achieve maybe on an organic basis, let's exclude that divestiture of the 11% to 12% production decline? I mean, should you be up high single digits, just looking at this year for production volumes?

Question: Tim Moore - EF Hutton - Analyst : Great. No, that's really good color. And one last question for Mark, maybe. I know you did the $20 million impairment in the fourth quarter and $6.5 million in the third quarter. If the prices stay fairly flattish or not down too much. I mean would you expect you could be done with impairments for the rest of this year?

Question: Tim Moore - EF Hutton - Analyst : Yeah. No, I figured that. I just think maybe we got past March could be not as much of an issue. But thanks a lot. I appreciate all the color and the answers.