U.S. Energy Corp. (USEG) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

to a multi-decade production tail. We have approached the oil business with discipline. We're not adding incremental rigs or chasing growth for growth's sake. We're using CutBank as the captive CO2 outlet that completes our integrated value chain. With that operational and commercial picture in place, I'd like to turn it over to Mark to walk through the capital structure, where we've made significant progress this quarter. Thanks, Ryan, and good morning, everyone. I want to keep my remarks focused on the capital structure. because that is where the most consequential financial work has happened this quarter. There are three pieces I'll cover, the phase one capital stack, the equity line of credit, and the path forward. First, the phase one capital stack is now complete. In March, we executed an equity offering that brought in capital needed to fund development and strengthen the balance sheet. On April 20, we amended our senior secured credit agreement, doubling the borrowing base to $20 million, fixing the interest margin at 200 basis points over the alternative base rate, and importantly, suspending quarterly financial covenant testing through the physical quarter ending March 31, 2027. The facility allows revolving borrowings through its May 31, 2029 maturity with no pre-maintenance penalties. These are favorable terms for a project under construction, and they provide the flexibility to execute construction without covenant pressure during the build phase. This capital stack will take us through completion of phase one and into revenue generation. Second, on the equity line of credit, we have not drawn on the ELOC since March 2nd, and concurrent with the closing of the expanded debt facility, we have formally suspended further use of the ELOC. We took this step d...