COMPANY TO CONSIDER A DUAL LISTING ON THE TORONTO STOCK EXCHANGE
RIVERTON, Wyo., July 2 /PRNewswire-FirstCall/ -- U.S. Energy Corp. (NASDAQ:USEG), a diversified natural resource exploration company announced today that it will initiate a share buy back program. The Company is also pleased to provide its corporate development strategy along with several project updates as follows.
Share Buy Back Program The Board of Directors of USEG has approved a share buy back program for up to $5 million in USEG stock. The buy back program, effective immediately, will be handled exclusively through an individual brokerage firm and will be subject to blackout periods.
Corporate Development Plans The Company is also pleased to provide the following review of its Board-approved corporate development plans and business development strategies, including: 1. The recent engagement of RBC Capital Markets as an investment banking
advisor to, among other things, assist the Company in the identification
and evaluation of project ventures and acquisitions.
2. An emphasis on investments in the natural resource sector, including
oil and gas, through joint ventures or acquisitions comprising
approximately 70% of the Company's working capital. Consistent with our
corporate history, our greatest investment emphasis will remain in the
natural resource development sector.
3. An emphasis on cash flow investments in other sectors related to the
surging growth in the energy basins and metro areas of the inter-mountain
west comprising approximately 30% of the Company's working capital,
including real estate development and acquisitions. The corporate
objective here is to continue to diversify U.S. Energy Corp.'s business
interests into cash flow and revenue-generating activities in geographic
areas that are significantly influenced by oil and gas and mining
activities.
4. Completion of the Crested Corp. merger. This synergetic combination
of companies is expected to occur in the fourth quarter of 2007.
5. The Company is considering a listing on the Toronto Stock Exchange
(TSX) while maintaining its listing on the Nasdaq Capital Market. The TSX
is one of the most active and visible stock exchanges in the world for
natural resources companies.
Project Updates Lucky Jack Molybdenum Project
The Company will continue to focus significantly upon the advancement of its "world-class" Lucky Jack molybdenum project located in west central Colorado, with an objective of bringing the mine into production as soon as feasible. The project operator, Kobex Resources Ltd. (KBX.V), (which has an option to purchase a 50% interest in the project for $50 million and is solely responsible for the first $50 million of expenditures on the project), has recently raised approximately $25 million in new capital for the Lucky Jack Project on Mt. Emmons. A comprehensive update on recent developments and planned activities will be issued on Thursday, July 5, 2007.
Oil and Gas The Company has reentered the oil and gas exploration arena by signing an Exploration and AMI Agreement in the Gulf Coast region of the United States. Please see our release dated July 2, 2007.
Sutter Gold Based on the success of Sutter's 18,000 foot 2006-2007 core drilling program at its Lincoln Project located in the historic Mother Lode Mining District of northern California, management has decided to expand the program with a new 9,500 foot surface and underground core drilling program. The primary goal of the new drill program is to extend the gold resource contained in the Keystone 5 vein which could potentially host up to 300,000 tons of new mineralization. Sutter expects to receive an updated resource report on the project within the next week. The updated resource report is the final component required for completing the independent pre-feasibility study which should be released by the end of July 2007.
A Phase I core drilling program is planned for August-September 2007 at Sutter Gold's concession in the heart of the historic El Alamo Gold District in Baja California Norte, Mexico. El Alamo was the site of the gold rush of 1888 and a proven high grade district with geologic similarities to the prolific Mother Lode. Premier Gold Mines Limited (PGM.V) is Sutter's partner in this exploration program and, is committed to funding the first $1.5 million in exploration expenditures.
Gillette, Wyoming Multi-Family Project Commencement of site work and infrastructure installation is underway at U.S. Energy Corp.'s multi-family housing development in Gillette, Wyoming. To date, the Company has invested $3.6 million in land acquisition, entitlements and site and civil infrastructure work. The total cost for the 216-apartment complex is expected to approximate $26 million, and the Company recently received a $29 million independent appraisal for the project.
The city of Gillette, Wyoming continues to grow at an accelerated pace due to the tremendous coal reserves in the Powder River Basin ("PRB") in Wyoming. Gillette's population is forecast to expand from approximately 27,000 today to 50,000 by the year 2015. The Powder River Basin produced nearly 400 million tons of low sulphur coal in 2006, and such production is projected to reach 600 million tons annually by 2012. In addition, railroads are being expanded in the basin, and construction should be underway on two new coal-fired power plants in the next 12-18 months. The PRB is also the leading natural gas producing basin in Wyoming. The resultant strong economy in the area has driven the apartment vacancy rate in Gillette to an astoundingly low .027% and created an ideal environment for U.S. Energy Corp.'s new apartment project. Due to the housing crisis in Gillette, the Company expects to pre-lease most, if not all, of its housing units at a premium to current rents before construction of the project is completed.
The management of USEG has received conditional approval to finance up to $21 million on the project and expects to receive a construction finance commitment soon.
Management Comments "Today our Company is clearly in the best position it has been in since its inception, from both a financial perspective and in terms of the opportunities available for the enhancement of shareholder values," observed Mark J. Larsen, President and Chief Operating Officer of U.S. Energy Corp. "We are pleased to present our corporate vision to shareholders and to have announced a special cash dividend last week. We firmly believe that our shares are undervalued at their current price on Nasdaq and, for this reason, our Board has approved the repurchase of up to $5 million in our common stock, when management considers such transactions appropriate." He added, "The vision for our Company is clear. Our strongest emphasis will remain to focus on natural resource development as we announced today that we have entered into an Exploration and AMI Agreement in the Gulf Coast region of the United States. Additionally, we have several other mineral projects under review and we will continue to be very selective regarding the projects we pursue. At the same time, we also look to diversify our interests by finding select investment opportunities in other sectors that we firmly believe will enhance shareholder value through the establishment of recurring revenues and cash flow." "With our strong cash position and a well-capitalized Lucky Jack project operator, Kobex Resources, we look to effectively execute on our stated goals of building shareholder value," stated Keith G. Larsen, Chief Executive Officer of U.S. Energy Corp. "We own one of the most exciting mineral projects in the world with Lucky Jack. Its 'world-class' resources and our 'world-class' operating partner present an opportunity for us to develop one of the largest and richest mineral deposits in the world. Additionally, we have engaged a 'world-class' investment banking firm to help guide us through the exciting days ahead as we build on what we have now and the opportunities yet to come." Corporate Conference Call/Webcast When: Monday, July 9, 2007 at 12 Noon EDT (10 a.m. MDT) Dial-In Number: (866) 257-9956 (within US and Canada), (706) 645-9218
(International) Replay Number: (800) 642-1687 (within US and Canada), (706) 645-9291
(International). The replay will be available starting
at approximately 2 p.m. EDT on July 9, 2007 and will be
available for 7 days through 11:59 p.m. EDT on Monday,
July 16, 2007. ID number for replay is: 5945554.
Webcast: The live webcast may be accessed by going to
http://www.videonewswire.com/event.asp?id=40676. Web
participants are encouraged to go to the site at least
15 minutes prior to the start of the call to register,
download and install any necessary audio software. ABOUT U.S. ENERGY CORP. AND CRESTED CORP.
Disclosure regarding mineral resources under sec and canadian regulations;
And forward-looking statements The Company owns or may come to own stock in companies which are traded on foreign exchanges, and may have agreements with some of these companies to acquire and/or develop the Company's mineral properties. Examples of these other companies are Sutter Gold Mining Inc., sxr Uranium One, and Kobex Resources Ltd. These other companies are subject to the reporting requirements of other jurisdictions.
United States residents are cautioned that some of the information available about our mineral properties, which is reported by the other companies in foreign jurisdictions, may be materially different from what the Company is permitted to disclose in the United States.
This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this release.
For further information on the differences between the reporting limitations of the United States, compared to reports filed in foreign jurisdictions, and also concerning forward-looking statements, please see the Company's Form 10-K ("Disclosure Regarding Forward-Looking Statements"; "Disclosure Regarding Mineral Resources under SEC and Canadian Regulation"; and "Risk Factors"); and similar disclosures in the Company's Forms 10-Q. DATASOURCE: U.S. Energy Corp.
CONTACT: Keith G. Larsen, CEO, or Mark Larsen, President, both of U.S.
Energy Corp., +1-307-856-9271
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