U.S. Energy (NASDAQ: USEG) funds Big Sky Phase 1, suspends equity line

Rhea-AI Filing Summary

U.S. Energy Corp. expanded and amended its senior secured credit facility to support development of the Big Sky Carbon Hub and reduce reliance on equity financing. The borrowing base under its revolving credit agreement with Firstbank Southwest doubled from $10,000,000 to $20,000,000, with loans available to be borrowed, repaid and re-borrowed until May 31, 2029. Interest now accrues at the alternate base rate plus a fixed 2.00% margin, alongside a 0.50% commitment fee on unused capacity. Testing of key financial covenants is suspended until the quarter ending March 31, 2027, and the company reports $2,500,000 currently outstanding under the facility.

The company states that the amended credit facility, together with proceeds from its March 2026 equity offering, is expected to complete the Phase 1 capital stack for the planned Big Sky Carbon Hub, targeting initial commercial operations in Q1 2027. U.S. Energy is formally suspending further use of its equity line of credit of up to $25,000,000, last used on March 2, 2026 at an average price of $1.16 per share. Management highlights near-term goals including securing a long-term helium offtake agreement and obtaining anticipated summer 2026 EPA decisions on two Monitoring, Reporting, and Verification plans, which are important to Section 45Q tax credit eligibility for Big Sky.

Positive

• Phase 1 funding substantially de-risked: The company states that the expanded $20,000,000 credit facility plus March 2026 equity proceeds are expected to complete the Phase 1 capital stack for the Big Sky Carbon Hub, supporting its planned commercial operations timeline in Q1 2027.
• Reduced perceived equity dilution: U.S. Energy is formally suspending further use of its up to $25,000,000 equity line of credit, which it explicitly frames as addressing a perceived dilution overhang and refocusing attention on execution at Big Sky.

Negative

• Higher leverage with delayed covenant testing: The borrowing base under the credit agreement is doubled to $20,000,000, and testing of key financial covenants such as the total debt-to-EBITDAX and current ratio tests is suspended until the quarter ending March 31, 2027, increasing reliance on lender support during the build-out period.

Insights

Energy infrastructure and credit analyst

Expanded debt facility secures Big Sky Phase 1 funding while reducing reliance on equity.

U.S. Energy Corp. has doubled the borrowing base on its revolving credit facility from $10,000,000 to $20,000,000, with availability through May 31, 2029. The interest margin is set at a fixed 2.00% over an alternate base rate, plus a 0.50% fee on unused capacity, with customary covenants and mandatory repayment mechanics.

The company indicates that this expanded facility, together with proceeds from its March 2026 equity raise, is expected to complete the Phase 1 capital stack for the Big Sky Carbon Hub, targeting commercial operations in Q1 2027. Financial covenant testing is suspended until the quarter ending March 31, 2027, providing operational runway during construction but also delaying leverage and liquidity checks under the agreement.

Management is formally suspending further use of its up to $25,000,000 equity line of credit, which it links to addressing perceived dilution concerns. Near-term operational catalysts described include a long-term helium offtake agreement and anticipated summer 2026 EPA decisions on two Monitoring, Reporting, and Verification plans tied to Section 45Q tax credits for Big Sky.

8-K Event Classification

5 items: 1.01, 2.03, 7.01, 8.01, 9.01

5 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial

The company incurred a new significant debt or off-balance-sheet obligation.

Item 7.01 Regulation FD Disclosure Disclosure

Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.

Item 8.01 Other Events Other

Voluntary disclosure of events the company deems important to shareholders but not covered by other items.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Borrowing base after amendment: $20,000,000 Previous borrowing base: $10,000,000 Maximum credit amount: $100,000,000 +5 more

8 metrics

Borrowing base after amendment $20,000,000 Revolving credit agreement borrowing base following Second Amendment

Previous borrowing base $10,000,000 Revolving credit agreement borrowing base before Second Amendment

Maximum credit amount $100,000,000 Overall maximum credit amount under the credit agreement

Current outstanding borrowings $2,500,000 Amount outstanding under the credit agreement as of report date

Interest margin 2.00% per annum Margin over alternate base rate on outstanding borrowings

Commitment fee 0.50% per annum Fee on average daily unused portion of borrowing base

Maturity date May 31, 2029 Date when all revolving loans under credit agreement must be repaid

Equity line capacity $25,000,000 Maximum shares sale capacity under suspended equity line of credit

Key Terms

borrowing base, EBITDAX, Monitoring, Reporting, and Verification ("MRV") plans, Section 45Q tax credit, +2 more

6 terms

borrowing base financial

"Increase the borrowing base under the Credit Agreement from $10,000,000 to $20,000,000"

A borrowing base is the amount a lender will allow a company to borrow based on the value of assets the company offers as security, typically things like accounts receivable and inventory. It matters to investors because it sets a practical ceiling on short-term financing and influences a company’s liquidity and risk: if the borrowing base falls, the company may lose access to cash or be forced to sell assets, which can affect operations and share value.

EBITDAX financial

"limit the Company’s ratio of total debt to EBITDAX (as defined in the Credit Agreement) to 3:1"

EBITDAX is a measure of a company's operating profit that adds back interest, taxes, depreciation, amortization and exploration costs to net income. Think of it as the cash-generating power of a business before financing, tax effects, non-cash accounting charges and the variable cost of searching for new reserves—useful for comparing companies whose exploration spending or accounting treatments differ. Investors use it to assess core operating performance and short-term cash flow potential without those distortions.

Monitoring, Reporting, and Verification ("MRV") plans technical

"advance the two Monitoring, Reporting, and Verification (“MRV”) plans previously submitted to the U.S. Environmental Protection Agency"

Section 45Q tax credit financial

"supporting the Section 45Q tax credit framework central to the Company’s Big Sky economic model"

A Section 45Q tax credit is a U.S. federal tax incentive that pays a fixed amount for each ton of carbon dioxide a project captures and either stores underground or puts to approved use. For investors, it works like a per‑ton rebate that improves a carbon‑capture project's cash flow and lowers the effective cost of building and operating the facility, often making otherwise marginal projects financially viable.

equity line of credit ("ELOC") financial

"formally suspending further use of its existing equity line of credit (“ELOC”)"

alternate base rate ("ABR") financial

"interest ... will accrue at an interest rate equal to the alternate base rate ... plus an applicable margin of 2.00% per annum"

Understanding 8-K Material Events →

false 0000101594 0000101594 2026-04-17 2026-04-17

US ENERGY CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 17, 2026

U.S. ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 000-06814 (Commission File Number) 83-0205516 (IRS Employer Identification No.)

1616 S. Voss, Suite 725, Houston, Texas		77057
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (303) 993-3200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value Title of each class USEG Trading Symbol(s) The NASDAQ Stock Market LLC (Nasdaq Capital Market) Name of exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

As previously reported in the Current Reports on Form 8-K filed by U.S. Energy Corp. (“U.S. Energy”, “we”, “us” or the “Company”) with the Securities and Exchange Commission (the “SEC” or the “Commission”) on January 10, 2022 and September 19, 2025, on January 5, 2022, the Company entered into a credit agreement (as amended and modified from time to time, the “Credit Agreement”) with Firstbank Southwest (“Firstbank”), as administrative agent for one or more lenders (the “Lenders”), and the Lenders, which provided for a revolving line of credit, subject to adjustment as discussed in the Credit Agreement, and a maximum credit amount of $100,000,000. The Credit Agreement was previously amended by (i) that certain Borrowing Base Increase Letter Agreement dated July 26, 2022 (the “Borrowing Base Increase Letter”), between the Company and Firstbank, as administrative agent for the Lenders, and (ii) that certain First Amendment to Credit Agreement and Limited Waiver dated September 16, 2025 and effective August 1, 2025 (the “First Amendment”), among the Company, Firstbank, as administrative agent for the Lenders, and the Lenders.

On April 17, 2026, the Company entered into a Second Amendment to Credit Agreement with Firstbank, as administrative agent for the Lenders, and the Lenders (the “Second Amendment”).

Pursuant to the Second Amendment, the Credit Agreement was amended to:

(a)    Increase the borrowing base under the Credit Agreement from $10,000,000 to $20,000,000;

(b)    Amend the applicable margin used to calculate the interest rate on outstanding borrowings under the Credit Agreement to a fixed 2.00% per annum (as further described below);

(c)    Suspend testing of the financial covenants under the Credit Agreement until the fiscal quarter ending March 31, 2027; and

(d)    Make certain other changes to the Credit Agreement as described in greater detail in the Second Amendment.

The Second Amendment includes customary representations and warranties of the Company.

The First Amendment includes certain post-closing conditions of the Company and customary representations and warranties of the Company.

As a result of the First Amendment and Second Amendment, revolving loans under the Credit Agreement may be borrowed, repaid and re-borrowed until May 31, 2029, when all outstanding amounts must be repaid.

Following the effectiveness of the Second Amendment, interest on the outstanding amounts under the Credit Agreement will accrue at an interest rate equal to the alternate base rate (which is the greatest of (i) the prime rate in effect on such day, and (ii) the Federal Funds rate in effect on such day (as determined in the Credit Agreement) plus 0.50%) (the “ABR”), plus an applicable margin of 2.00% per annum.

In the event that certain events of default (as described in greater detail under the Credit Agreement) occur, the outstanding amounts will bear an additional 2.00% interest per annum. Accrued interest on each revolving loan is payable in arrears on the last day of each March, June, September and December.

The Company generally has the right to make prepayments of the borrowings at any time without penalty or premium under the Credit Agreement. A commitment fee of 0.50% accrues on the average daily amount of the unused portion of the borrowing base and is payable in arrears on the last business day of March, June, September and December of each year and on the maturity date.

We are also required to make certain mandatory repayments under the Credit Agreement, in the event the borrowing base decreases below the aggregate amount of loans made by the Lenders and/or if as of the last business day of any calendar month, certain required debt ratios required under the Credit Agreement are not met, there are outstanding amounts owed to the Lenders, and the Company has consolidated cash on hand in excess of $5 million, and in some cases we are also required to pay cash to the agent to be held as collateral.

The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, transactions with affiliates, and dividends and other distributions. In addition, the Credit Agreement contains financial covenants, tested quarterly, that limit the Company’s ratio of total debt to EBITDAX (as defined in the Credit Agreement) to 3:1 and require its ratio of consolidated current assets to consolidated current liabilities (as each is described in the Credit Agreement) to remain at 1:1 or higher. As amended by the Second Amendment, compliance with such financial covenants will first be tested as of the fiscal quarter ending March 31, 2027.

We currently have $2,500,000 outstanding under the Credit Agreement as of the date of this Report.

The foregoing summary description of the Credit Agreement, the Borrowing Base Increase Letter, the First Amendment and the Second Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, the Borrowing Base Increase Letter, the First Amendment and the Second Amendment, which are incorporated by reference herein as Exhibits 10.1, 10.2 and 10.3 and attached hereto as Exhibit 10.4 to this Current Report on Form 8-K, respectively, and are incorporated by reference in this Item 1.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03 in its entirety.

Item 7.01 Regulation FD Disclosure.

On April 20, 2026, the Company issued a press release announcing the entry into the Second Amendment and certain other matters. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01. Other Events.

The availability of funds under the Credit Agreement, as amended, together with proceeds from the Company’s March 2026 equity offering, are expected to provide funding visibility into Phase 1 construction of the Company’s planned Big Sky Carbon Hub (for carbon capture, utilization and sequestration), with initial commercial operations targeted for Q1 2027.

Following the entry into the Second Amendment, the Company has determined to suspend further use of its October 9, 2025, Common Stock Purchase Agreement entered into with Roth Principal Investments, LLC (the “Purchase Agreement”), pursuant to which the Company has the right, in its sole discretion, to sell to Roth Principal Investments, LLC, up to $25,000,000 of shares of the Company’s common stock, subject to certain conditions and limitations contained in the Purchase Agreement, from time to time during the term of the Purchase Agreement.

With the Phase 1 capital stack expected now in place for the Company’s planned Big Sky Hub, the Company’s focus is shifting to plant construction and the near-term operational milestones previously outlined, including initial helium sales and carbon management operations targeted to commence in Q1 2027. The execution of a long-term helium offtake agreement in advance of commercial operations remains a targeted near-term catalyst.

The Company also continues to advance the two Monitoring, Reporting, and Verification (“MRV”) plans previously submitted to the U.S. Environmental Protection Agency for its Class II injection wells, the first such submissions in the State of Montana. Based on the current progression of the EPA review process, decisions are anticipated during the summer of 2026, which if approved, will represent an important regulatory milestone supporting the Section 45Q tax credit framework central to the Company’s Big Sky economic model.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.		Description
10.1#		Credit Agreement dated as of January 5, 2022, among U.S. Energy Corp., as borrower, Firstbank Southwest, as Administrative Agent and the Lenders party thereto (Filed as Exhibit 10.6 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 10, 2022 (File No. 000-06814) and incorporated by reference herein)
10.2		Borrowing Base Increase Letter Agreement dated July 26, 2022, between U.S. Energy Corp. and Firstbank Southwest, as Administrative Agent (Filed as Exhibit 10.3 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on July 28, 2022 (File No. 000-06814) and incorporated by reference herein)
10.3#		First Amendment to Credit Agreement and Limited Waiver dated September 16, 2025, among U.S. Energy Corp., as borrower, Firstbank Southwest, as Administrative Agent and the Lenders party thereto
10.4#*		Second Amendment to Credit Agreement dated April 17, 2026, among U.S. Energy Corp., as borrower, Firstbank Southwest, as Administrative Agent and the Lenders party thereto
99.1		Press Release dated April 20, 2026
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

*	Filed herewith.
**	Furnished herewith.

#         Certain schedules, exhibits, annexes, and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that U.S. Energy Corp. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and assumptions. You can identify these forward-looking statements by words such as “may,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other filings with the Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements, as discussed in Exhibit 99.1 attached hereto. Accordingly, readers should not place undue reliance on any forward-looking statements. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, filed with the SEC and available at www.sec.gov and in the “Investors” – “SEC Filings” section of the Company’s website at https://usnrg.com. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	U.S. ENERGY CORP.
	By:	/s/ Ryan Smith
		Ryan Smith
		Chief Executive Officer

Dated: April 20, 2026

Exhibit 99.1

U.S. Energy Corp. Closes Expanded Senior Secured Debt Facility, Completing Phase 1 Capital Stack for Big Sky Carbon Hub; Formally Suspends Use of Equity Line of Credit

HOUSTON, TX., April 20, 2026 -- U.S. Energy Corp. (NASDAQ: USEG) (“U.S. Energy” or the “Company”), an integrated energy company advancing a diversified industrial gas, energy, and carbon management platform, today announced the closing of an expanded senior secured debt facility (the “Facility”) that, together with proceeds from the Company’s March 2026 equity offering, is expected to complete the Phase 1 capital stack for the planned Big Sky Carbon Hub (“Big Sky”). Concurrently, the Company announced that it is formally suspending further use of its existing equity line of credit (“ELOC”).

• Phase 1 Capital Stack Complete: The Facility, together with proceeds from the Company’s March 2026 equity offering, provides funding visibility into Phase 1 construction of Big Sky, with initial commercial operations targeted for Q1 2027.

• Facility Structure: The $20 million facility is priced at the existing borrowing base grid plus 200 basis points (ABR + 2.25% to 3.25% depending on utilization), with no financial covenant testing until March 31, 2027, a final maturity of May 31, 2029, and no prepayment penalties.

• ELOC Formally Suspended: The ELOC has not been drawn since March 2, 2026. The Company is formally suspending further use of the facility, which addresses a perceived dilution overhang associated with the ELOC.

• Near-Term Execution Focus: With the Phase 1 capital stack in place, the Company’s focus shifts to plant construction and the near-term operational milestones previously outlined, including initial helium sales and carbon management operations targeted to commence in Q1 2027.

“The closing of this expanded facility completes the Phase 1 capital stack for Big Sky through a combination of the March 2026 equity offering and project-oriented senior secured debt,” said Ryan Smith, President and Chief Executive Officer. “We appreciate the continued support of our banking partners. The terms achieved here provide meaningful flexibility, with no financial covenant testing until March 31, 2027 and no prepayment penalties. The closing also allows us to formally suspend further use of our ELOC, which has not been drawn since March 2, 2026. Today’s announcement is intended to address a perceived dilution overhang tied to the ELOC and to allow investors to refocus on Phase 1 execution and the operational milestones ahead.”

Expanded Senior Secured Debt Facility

The expanded $20 million facility builds on the Company’s existing senior secured credit structure and is expected to provide the remainder of the development capital required to complete Phase 1 infrastructure at Big Sky. Key terms include:

• Increased Facility Size: $20 million

• Pricing: Existing borrowing base grid plus 200 basis points, ranging from ABR + 2.25% to ABR + 3.25% depending on utilization

• Financial Covenants: No financial covenant testing until March 31, 2027

• Maturity: May 31, 2029

• Prepayment: No prepayment penalties

Together with the proceeds of the Company’s equity capital markets activity completed in early March 2026, the facility is expected to complete the funding required to deliver Phase 1 of Big Sky into commercial operations.

The Facility includes customary hedging requirements, which the Company has satisfied. Additional detail regarding the Company’s hedge position will be provided in its upcoming quarterly results.

Equity Line of Credit – Formal Suspension

The Company maintains an existing equity line of credit, which has served as a flexible capital tool during earlier stages of the Big Sky development program. The ELOC was last utilized on March 2, 2026, with issuances on that date executed at an average price of $1.16 per share. No issuances have been made on the facility at any point thereafter.

With the Phase 1 capital stack now in place through the Facility and the March 2026 equity offering, the Company is formally suspending further use of the ELOC and does not anticipate drawing on it in connection with Phase 1.

Operational Update

The Company continues to advance commercial discussions with potential helium offtake partners for Big Sky against a tight global helium supply backdrop. Execution of a long-term helium offtake agreement in advance of commercial operations remains a targeted near-term catalyst.

The Company continues to advance the two Monitoring, Reporting, and Verification (“MRV”) plans previously submitted to the U.S. Environmental Protection Agency for its Class II injection wells, the first of such submissions in the State of Montana. Based on the current progression of the EPA review process, approvals are anticipated during the summer of 2026, representing an important regulatory milestone supporting the Section 45Q tax credit framework central to the Big Sky economic model.

ABOUT U.S. ENERGY CORP.

U.S. Energy Corp. (NASDAQ: USEG) is building an integrated energy and carbon management platform. The Company owns and operates the Big Sky Carbon Hub and Cut Bank oil field in Montana, generating three independent revenue streams — helium, carbon management, and oil — from a wholly owned and operated asset base. U.S. Energy is positioned at the intersection of critical supply, domestic energy production, and federal energy policy. More information can be found at www.usnrg.com.

INVESTOR RELATIONS CONTACT

Mason McGuire

IR@usnrg.com

(303) 993-3200

www.usnrg.com

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.

Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, risks relating to: the Company’s ability to complete construction of the Big Sky Carbon Hub on time and on budget; the Company’s ability to comply with the terms of its senior credit facilities; the Company’s access to capital on acceptable terms; the volatility of commodity prices, including helium, oil and natural gas; the Company’s success in discovering, estimating, developing and replacing reserves; risks related to the status and availability of gathering, transportation, processing, and storage facilities; risks relating to regulatory changes, including those related to the Section 45Q tax credit, carbon dioxide and greenhouse gas emissions; the business, economic and political conditions in the markets in which the Company operates; actions of competitors or regulators; inflationary risks and changes in interest rates; the potential disruption or interruption of the Company’s operations due to war, accidents, political events, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the Company’s control; and other risk factors included from time to time in documents the Company files with the Securities and Exchange Commission, including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. These reports and filings are available at www.sec.gov.

The Company cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements except as required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. The forward-looking statements included in this communication are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. The Company undertakes no obligation to update these statements after the date of this release, except as required by law.

FAQ

What did U.S. Energy Corp. (USEG) change in its credit facility?

U.S. Energy doubled the borrowing base under its revolving credit agreement from $10 million to $20 million and extended availability until May 31, 2029. Interest now accrues at the alternate base rate plus a fixed 2.00% margin, with a 0.50% fee on unused capacity.

How does the amended debt facility affect funding for USEG’s Big Sky Carbon Hub?

The company states the expanded $20 million facility, combined with its March 2026 equity offering, is expected to complete the Phase 1 capital stack for Big Sky. This is intended to support construction and initial commercial operations targeted for Q1 2027.

What financial covenant relief did USEG receive in the amendment?

Testing of key financial covenants, including the 3:1 total debt-to-EBITDAX limit and the 1:1 current ratio requirement, is suspended until the fiscal quarter ending March 31, 2027. Compliance will first be measured as of that quarter under the amended agreement.

How much is currently outstanding under USEG’s credit agreement?

U.S. Energy reports having $2.5 million outstanding under its revolving credit agreement as of the report date. This amount is part of the broader facility, which now has a $20 million borrowing base and an overall maximum credit amount of $100 million.

What is happening with U.S. Energy’s equity line of credit (ELOC)?

The company is formally suspending further use of its up to $25 million ELOC, last used on March 2, 2026 at an average price of $1.16 per share. Management links this step to addressing perceived dilution concerns as Phase 1 funding is now in place.

What regulatory milestones are important for USEG’s Big Sky Carbon Hub?

U.S. Energy highlights two Monitoring, Reporting, and Verification (MRV) plans submitted to the U.S. EPA for Class II injection wells. Decisions are anticipated in summer 2026, and approvals would support the Section 45Q tax credit framework central to Big Sky’s economics.

Filing Exhibits & Attachments

6 documents

Press Releases

• EX-99.1 EXHIBIT 99.1 21.1 KB

Agreements & Contracts

• EX-10.4 EXHIBIT 10.4 87.2 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 3.5 KB
• EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE 11.2 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 15.0 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 11.3 KB