Tuesday, December 15, 2009

USEG news

Last week, U.S. Energy Corp. (Nasdaq Capital Market: USEG) announced that it had priced a secondary offering of 5 million shares at $5.25, and its stock dropped on the news, as it had on the company's initial announcement of its (larger) shelf registration in October, on fears of dilution1. The main reason USEG is raising additional capital is to fund its participation in additional Bakken wells with BEXP. After the close Monday, USEG announced the latest results from that drilling program:

U.S. Energy Corp. Announces Initial Production Rate of Approximately 3,394 BOE/D From the Williston 25-36 #1H Well

Those are the highest initial production rates so far on this drilling program.

1When I spoke to him on the day USEG announced its shelf registration, CEO Keith Larsen said he'd been getting a number of angry calls about it. I reminded him of the old Michael Milken quote, that the best time to raise capital is when you can.

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