USEG Update

U.S. Energy Corp. (Nasdaq: USEG) held its Q2 conference call Friday. I was meeting Daniel Wahl and commenter Ravinsu for brunch in Manhattan at the time, so I caught the replay later in the day. The bigger news for USEG was its announcement that it had completed the sale of most of its shares in Sutter Goldmining Inc. for C$5.4 million. As part of the deal, USEG also invested C$500k for shares and warrants in Sutter Goldmining Inc. in a private placement. So the net proceeds from this to USEG were C$4.9 million, or about U.S.$4.7 million. Add that $4.7 million to the cash and short-term investments listed in USEG's last 10Q, and you get about $79 million in cash and Treasuries on USEG's balance sheet. The company's current market cap is about $77 million.

One question that a shareholder asked on the conference call was whether the company would consider using some of this cash horde to pay out a special dividend. USEG CEO Keith Larsen said he'd mention it to the board, but also pointed out that cash is fairly hard to come by in today's credit environment, so it's helpful to have it on the balance sheet to take advantage of investment opportunities that may come up.