U.S. Energy (NASDAQ: USEG) OKs Big Sky Carbon Hub build, targets Q1 2027 start

Rhea-AI Filing Summary

U.S. Energy Corp. has reached a Final Investment Decision to build its processing facility at the Big Sky Carbon Hub in Montana and has begun capital spending. The company signed a fixed-scope EPC contract with CANUSA EPC to handle engineering, procurement, fabrication, construction, and commissioning.

The Big Sky facility is designed for about 8.0 MMcf/d of inlet capacity, with targeted initial annual output of roughly 12 million cubic feet of high-purity helium and about 125,000 metric tons of refined CO₂. A third-party evaluation estimates Phase 1 resources of approximately 1.3 Bcf of helium and 444 Bcf of naturally occurring CO₂ across about 80,000 net acres.

Commercial operations are targeted to start in the first quarter of 2027. The company expects to qualify for around $85 per metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value. Management highlights three producing wells already online and positions Big Sky as a multi-revenue platform from helium, carbon management, and oil.

Positive

• Big Sky FID and EPC contract: The company has formally sanctioned construction of the Big Sky Carbon Hub facility, signed a fixed-scope EPC agreement with CANUSA EPC, and begun capital spending, targeting Q1 2027 operations with multi-decade helium and CO₂ resources.
• Projected 45Q tax credit value: Management expects to qualify for roughly $85 per metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value, which could materially enhance project economics if realized.

Negative

• Execution and regulatory risk: The company highlights risks around completing the Big Sky facility on time and within budget, dependence on CANUSA EPC and other contractors, supply chain constraints, and obtaining EPA MRV and other approvals needed to qualify for Section 45Q tax credits.
• Policy and market uncertainty: Forward-looking statements emphasize potential changes to the Section 45Q program, uncertainty over ultimate tax credit amounts, helium and CO₂ price volatility, and the need to secure a long-term helium offtake agreement on acceptable terms.

Insights

Energy infrastructure and carbon management analyst

FID locks in Big Sky build with sizable projected 45Q tax credits but execution and policy risks remain.

U.S. Energy has moved Big Sky from concept to committed project by reaching FID and signing a fixed-scope EPC agreement with CANUSA EPC. The facility targets 8.0 MMcf/d inlet capacity, annual output of 12 million cubic feet of helium and 125,000 metric tons of refined CO₂, backed by three drilled wells and company-operated acreage.

A third-party estimate of 1.3 Bcf helium and 444 Bcf CO₂ suggests long resource life, and the company expects roughly $85 per metric ton in Section 45Q credits, supporting about $130 million in Phase 1 tax credit value. These credits could materially influence project economics if realized.

However, the company cites significant risks: on-time, on-budget construction; reliance on CANUSA EPC and other vendors; obtaining EPA MRV approvals and other regulatory clearances; potential legislative changes to Section 45Q; commodity price volatility; and securing a long-term helium offtake agreement. Actual value creation will depend on executing construction, qualifying for credits, and ramping to targeted commercial operations in Q1 2027.

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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): March 18, 2026

U.S. ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware		000-06814		83-0205516
(State or other jurisdiction of incorporation)		(Commission File Number)		(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:

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

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 7.01. Regulation FD Disclosure.

On March 18, 2026, U.S. Energy Corp. (the “Company”) issued a press release announcing that the Company has reached a Final Investment Decision (“FID”) to build its processing facility at the Big Sky Carbon Hub in Montana and has commenced capital spending on the project. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.

The information responsive to Item 7.01 of this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed "filed" for 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, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

On March 18, 2026, U.S. Energy Corp. (the "Company") announced that it has reached a Final Investment Decision ("FID") to build its processing facility at the Big Sky Carbon Hub ("Big Sky") in Toole County, Montana, and has commenced capital spending on the project. In connection with the FID, the Company has engaged CANUSA EPC to perform engineering, procurement, fabrication, construction, and commissioning services for the facility under a fixed-scope contract structure.

The Big Sky Carbon Hub is a vertically integrated industrial gas and carbon management asset located in Montana’s Kevin Dome. The processing facility is designed for approximately 8.0 MMcf/d of inlet capacity, with targeted initial annual production of approximately 12 million cubic feet of high-purity helium and approximately 125,000 metric tons of refined CO₂. Commercial operations are targeted to commence in the first quarter of 2027. The Company expects to qualify for approximately $85 per metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.		Description
99.1*		Press Release of U.S. Energy Corp. dated March 18, 2026, announcing Final Investment Decision to Build Big Sky Carbon Hub; Targets Commercial Operations in Q1 2027
104		Inline XBRL for the cover page of this Current Report on Form 8-K

* Furnished herewith

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, which include, without limitation, risks associated with changes in inflation and interest rates and possible recessions; the ability of the Company to retain and hire key personnel; the business, economic and political conditions in the markets in which the Company operates; the ability of the Company to complete construction of the Big Sky Carbon Hub processing facility on time and within budget; risks related to the performance of CANUSA EPC and other third-party contractors and vendors, including supply chain disruptions and the availability of equipment and materials; the risk that the Company does not receive required regulatory approvals, including EPA Monitoring, Reporting, and Verification (“MRV”) approvals necessary to qualify for Section 45Q tax credits; the risk that the Section 45Q tax credit program is modified, reduced, or eliminated by legislative or regulatory action; uncertainty regarding the qualification and ultimate amount of any Section 45Q tax credits; risks related to the negotiation and execution of a long-term helium offtake agreement on commercially acceptable terms or at all; fluctuations in helium, CO₂, and oil and natural gas prices; uncertainties inherent in estimating quantities of helium and CO₂ resources and projecting future rates of production and timing of development activities; competition; operating risks; the Company’s anticipated operational results for 2026 and 2027, including, but not limited to, estimated or anticipated production levels, capital expenditures, and construction and commissioning timelines; acquisition risks; liquidity and capital requirements; the effects of governmental regulation; anticipated future production and revenue; the timing of construction, commissioning, and startup, and the impact of any delays thereon; dependence upon third-party vendors and contractors; economic uncertainty relating to increased inflation and global conflicts; the lack of capital available on acceptable terms to finance the Company’s continued growth; the review and evaluation of potential strategic transactions and their impact on stockholder value; the process by which the Company engages in evaluation of strategic transactions; the outcome of potential future strategic transactions and the terms thereof; political conditions in or affecting oil and natural gas producing regions and/or pipelines, including in Eastern Europe, the Middle East and South America; the Company’s ability to maintain the listing of its common stock on Nasdaq; and others, including those referenced in the press release and the Company’s filings with the Securities and Exchange Commission. 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:	March 18, 2026

Exhibit 99.1

U.S. Energy Corp. Reaches Final Investment Decision to Build Big Sky Carbon Hub Facility; Targets Commercial Operations in Q1 2027

HOUSTON, Tx., March 18, 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 that it has reached a Final Investment Decision (“FID”) for the construction of its processing facility at the Big Sky Carbon Hub (“Big Sky”) in Montana, and executed an Engineering, Procurement, and Construction (“EPC”) agreement with CANUSA EPC under a fixed-scope EPC contract structure.

• FID marks the pivotal execution milestone unlocking commercial operations at the Company's Big Sky Carbon Hub in Montana — capital spending has commenced.

• Facility designed for approximately 8.0 MMcf/d of inlet capacity, targeting ~12 MMcf of annual helium production and ~125,000 metric tons of refined CO₂ per year at initial operations.

• Company expects to qualify for approximately $85/metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value.

• Gathering pipeline installation to commence spring 2026; commissioning targeted for Q3 2026; initial helium sales and carbon management operations expected Q1 2027.

“Today’s announcements represent the culmination of 18 months of deliberate, disciplined execution, and the beginning of what we believe will be a transformational chapter for U.S. Energy,” said Ryan Smith, President and Chief Executive Officer of the Company. “We have reached FID, signed our EPC contract with CANUSA EPC, and construction is underway at Big Sky. Our recent successful capital markets activity has pulled forward both the timeline and certainty of construction, and today we are putting that capital to work. CANUSA EPC brings precisely the construction and execution expertise required to deliver a complex, integrated industrial gas and carbon management facility on time and on budget. With three producing wells online, final engineering complete, a purpose-built plant site secured, and EPA MRV applications submitted, every element of a de-risked project is in place.

Mr. Smith continued, “As global helium markets continue to tighten amid ongoing supply disruptions and increasing geopolitical uncertainty, we believe Big Sky is uniquely positioned to provide a secure, domestic source of this critical gas alongside its broader industrial gas and carbon management capabilities. We expect the market to increasingly recognize the differentiated, multi-revenue nature of this platform as we move through construction and toward cash flow generation at Big Sky in early 2027.”

EPC Agreement with CANUSA EPC

U.S. Energy has entered into an EPC agreement with CANUSA EPC, a leading construction and engineering services provider. Under the terms of the agreement, CANUSA EPC will perform engineering, equipment procurement, fabrication, construction, and commissioning for the facility under a fixed-scope EPC structure.  The agreement establishes a project budget with a defined contingency, providing schedule accountability and execution oversight from a proven partner. The execution of the EPC agreement represents one of the final pre-FID milestones required before commencing construction and was completed concurrently with the FID.

Initial expenditures are directed toward site preparation, procurement of long-lead equipment, and mobilization of the CANUSA EPC project team.

About the Big Sky Carbon Hub

The Big Sky Carbon Hub is a vertically integrated industrial gas and carbon management asset that combines helium production, CO₂ recovery and sequestration, and enhanced oil recovery (“EOR”) — all across Company-controlled and operated acreage. Through multiple strategic transactions over the past 18 months, U.S. Energy has assembled approximately 80,000 net acres in Montana’s Kevin Dome, with a third-party resource evaluation estimating a Phase 1 resource of approximately 1.3 billion cubic feet (“Bcf”) of helium and 444 Bcf of naturally occurring CO₂, underpinning a resource life of more than 50 years.

The processing facility is designed for approximately 8.0 MMcf/d of inlet capacity. At initial operations, the Company expects annual production of approximately 12 million cubic feet of high-purity helium and approximately 125,000 metric tons of refined CO₂ for use in EOR operations and permanent carbon sequestration. Our three already-drilled industrial gas wells are expected to deliver stable, low-decline production, supplying the initial processing facility for multiple years without the need for additional drilling.

Construction Timeline and Key Milestones

With FID achieved, the EPC contract executed, and capital spending underway, the Company is advancing the following near-term priorities:

• Capital spending commenced; CANUSA EPC mobilizing project team and initiating procurement of long-lead equipment

• Installation of approximately 10 miles of in-field gathering pipelines expected to commence spring 2026

• Gathering infrastructure and facility commissioning targeted for Q3 2026

• Receipt of EPA MRV approvals anticipated during 2026, enabling qualification of Section 45Q tax credits

• Execution of a long-term helium offtake agreement with a global industrial gas company — negotiations currently advanced

• Initial helium sales, carbon management operations, and CO₂-EOR activity expected to commence Q1 2027

Diversified Revenue Profile

The Big Sky Carbon Hub is positioned to generate three distinct, recurring revenue streams:

• Helium Sales: High-purity helium is a critical industrial gas with inelastic global demand and limited domestic supply, commanding premium pricing in long-term supply agreements. The Company is in advanced negotiations for a long-term offtake arrangement and expects to finalize commercial terms during 2026.

• Section 45Q Carbon Management Revenue: CO₂ captured from helium processing is expected to qualify for the federal Section 45Q tax credit, providing a policy-supported, commodity-independent revenue stream with meaningful Phase 1 value.

• CO₂-Enhanced Oil Recovery: A portion of captured CO₂ will be deployed in EOR operations at the Company’s Cut Bank oil field, located near Kevin Dome, creating incremental value through Company-controlled supply and existing infrastructure.

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: (1) the ability of the Company to grow and manage growth profitably and retain its key employees; (2) the ability of the Company to close previously announced transactions and the terms of such transactions; (3) risks associated with the integration of recently acquired assets; (4) the Company’s ability to comply with the terms of its senior credit facilities; (5) the ability of the Company to retain and hire key personnel; (6) the business, economic and political conditions in the markets in which the Company operates; (7) the volatility of oil and natural gas prices; (8) the Company’s success in discovering, estimating, developing and replacing oil and natural gas reserves; (9) risks of the Company’s operations not being profitable or generating sufficient cash flow to meet its obligations; (10) risks relating to the future price of oil, natural gas and NGLs; (11) risks related to the status and availability of oil and natural gas gathering, transportation, and storage facilities; (12) risks related to changes in the legal and regulatory environment governing the oil and gas industry, and new or amended environmental legislation and regulatory initiatives; (13) risks relating to crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; (14) technological advancements; (15) changing economic, regulatory and political environments in the markets in which the Company operates; (16) general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; (17) actions of competitors or regulators; (18) 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; (19) pandemics, governmental responses thereto, economic downturns and possible recessions caused thereby; (20) inflationary risks and recent changes in inflation and interest rates, and the risks of recessions and economic downturns caused thereby or by efforts to reduce inflation; (21) risks related to military conflicts in oil producing countries; (22) changes in economic conditions; limitations in the availability of, and costs of, supplies, materials, contractors and services that may delay the drilling or completion of wells or make such wells more expensive; (23) the amount and timing of future development costs; (24) the availability and demand for alternative energy sources; (25) regulatory changes, including those related to carbon dioxide and greenhouse gas emissions; (26) uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and timing of development activities; (27) risks relating to the lack of capital available on acceptable terms to finance the Company’s continued growth; (28) the review and evaluation of potential strategic transactions and their impact on stockholder value and the process by which the Company engages in evaluation of strategic transactions; and (29) other risk factors included from time to time in documents U.S. Energy files with the Securities and Exchange Commission, including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, and future annual reports and quarterly reports. These reports and filings are available at www.sec.gov. Unknown or unpredictable factors also could have material adverse effects on the Company’s future results.

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. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. 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. Finally, the Company undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

FAQ

What did U.S. Energy Corp (USEG) announce about the Big Sky Carbon Hub?

U.S. Energy Corp announced it has reached a Final Investment Decision to build its processing facility at the Big Sky Carbon Hub in Montana, signed a fixed-scope EPC contract with CANUSA EPC, and commenced capital spending, moving the project into full construction and execution.

What are the planned production capacities at U.S. Energy’s Big Sky facility?

The Big Sky processing facility is designed for about 8.0 MMcf/d of inlet capacity, with targeted initial annual production of roughly 12 million cubic feet of high-purity helium and approximately 125,000 metric tons of refined CO₂ for enhanced oil recovery and permanent carbon sequestration.

When does U.S. Energy Corp expect Big Sky Carbon Hub operations to start?

U.S. Energy targets commercial operations at the Big Sky Carbon Hub processing facility in the first quarter of 2027. Construction has begun following Final Investment Decision and execution of the EPC agreement, with three producing wells already drilled to supply the plant at startup.

How large are the helium and CO₂ resources at Big Sky according to U.S. Energy?

A third-party evaluation cited by U.S. Energy estimates Phase 1 resources of approximately 1.3 billion cubic feet of helium and 444 billion cubic feet of naturally occurring CO₂ across about 80,000 net acres in Montana’s Kevin Dome, supporting a potential resource life exceeding 50 years.

What Section 45Q tax credits does U.S. Energy expect from Big Sky?

The company expects to qualify for around $85 per metric ton in Section 45Q federal tax credits tied to CO₂ management at Big Sky, supporting an estimated $130 million in Phase 1 tax credit value, which management views as an important contributor to overall project economics.

What key risks to the Big Sky Carbon Hub project does U.S. Energy highlight?

U.S. Energy cites risks including construction timing and budget, performance of CANUSA EPC and other contractors, supply chain constraints, obtaining EPA MRV and other approvals, potential changes to Section 45Q, commodity price volatility, and successfully negotiating a long-term helium offtake agreement.

How does the Big Sky Carbon Hub fit into U.S. Energy Corp’s overall strategy?

The Big Sky Carbon Hub underpins U.S. Energy’s integrated energy and carbon management platform, combining helium production, CO₂ recovery and sequestration, and oil-related enhanced recovery. Management describes it as a multi-revenue, company-operated asset base supporting helium, carbon management, and oil income streams.

Filing Exhibits & Attachments

5 documents

Press Releases

• EX-99.1 EXHIBIT 99.1 30.6 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 3.5 KB
• EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE 11.5 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 15.5 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 11.7 KB