RIVERTON, Wyo., Aug. 2, 2010 (GLOBE NEWSWIRE) -- U.S. Energy Corp. (Nasdaq:USEG) ("USE" or the "Company"), a natural resources exploration and development company with interests in oil and gas, molybdenum, geothermal, and real estate assets, announced today that its wholly-owned subsidiary, Energy One LLC, has entered into a $75 million credit agreement ("Credit Facility") with BNP Paribas ("BNP").
The Credit Facility provides for maximum borrowings of up to $75 million, with an initial borrowing base of $12 million. It may be used to provide working capital for lease acquisitions, exploration and production operations, development (including the drilling and completion of wells), and for general corporate purposes. The Credit Facility has a 4-year term and the borrowing base will be redetermined semi-annually. Borrowings will bear interest at a spread ranging from 1.25% to 3.25% over the Prime Rate, Federal Funds Effective Rate or the Adjusted London Interbank Offered Rate (LIBOR), as the case may be, based upon the percentage of borrowing base that is advanced at any given time. Each quarter USE will pay a commitment fee of 0.50% per annum on the balance of the borrowing base that is not used.
USE has no current borrowings under the Credit Facility; the Company remains essentially debt free and is well capitalized. The BNP Credit Facility combined with the Company's existing commercial line of credit of $10 million brings the Company's credit availability to $22 million. It is anticipated that the BNP Credit Facility borrowing base will grow as additional reserves are added.
"This new Credit Facility provides U.S. Energy with another cost competitive, non-dilutive source of funding," said Keith Larsen, CEO of U.S. Energy Corp. "This additional financial resource will further enhance and improve our flexibility in the execution of our drilling, acquisition, and overall growth strategy," he added.
For further information, please see the Form 8-K which will be filed with the SEC on or before August 4, 2010.
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Forward-Looking Statements
This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," "target," "goal," or similar expressions. Forward-looking statements in this release relate to, among other things, USE's anticipation that the borrowing based under the BNP Facility will increase. 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 commodity and/or mineral prices, the availability of capital, competitive factors, and other risks described in the Company's filings with the SEC (including, without limitation, the Form 10-K for the year ended December 31, 2009 and the Form 10-Q filed May 10, 2010). By making these forward-looking statements, the Company undertakes no obligation to update these statements for changes after the date of this release.