U.S. Energy Corp. (NASDAQ:USEG)
U.S. Energy Corp. (NASDAQ:USEG) is worth only $6.5 million but so far today its stock is making news for all the right reasons. ESEG stock is up over 33% at 2 PM EST. Share volume is extraordinarily heavy – over 100 times the average.
Investors are jumping on board the energy company after it announced that it will participate in the upcoming horizontal drilling program on its existing acreage position targeting the development of the Georgetown formation in Zavala and Dimmit Counties, Texas. The development program will take place on acreage positions previously developed for shallower horizons. Operations are expected to begin in late October 2017 and the initial well will be drilled as a dual lateral.
David Veltri, Chairman and CEO of U.S. Energy Corp. (NASDAQ:USEG), stated, “We are pleased to announce our participation in the upcoming drilling program and excited for the future prospects of U.S. Energy as we continue our transition from being focused on restructuring the Company’s balance sheet to becoming a growth-oriented E&P Company. Our recently announced restructuring initiatives along with the completion of recent asset sales will allow us to re-deploy capital to focus on significant growth opportunities and position U.S. Energy to maximize returns for shareholders. This is the first newly drilled well that U.S. Energy has participated in since early 2015, and we look forward to evaluating and participating in other highly accretive development projects that are focused on capital returns and cash generation.”
USEG Stock Performance
U.S. Energy Corp. (NASDAQ:USEG) stock has been given a one year consensus price target of $3.90 by analysts. The stock is still around 50% off its 52-week high of $2.74 but is well north of its 52-week low of $0.60. For the year, shareholders have lost over 40% but over the last month USEG stock has gained over 25%. The stock has a Relative Strength Index figure of 77. Typically, traders believe that a figure over 70 indicates an “overbought” condition.
Sales have been in decline for the past three years. In 2014, U.S. Energy Corp. (NASDAQ:USEG) reported $32.4 million in sales, followed by annual figures of $10.3 million, and $5.7 million for 2016.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.