US Energy (USEG) 16th Annual LD Micro Invitational Conference summary

Strategic transformation and asset overview

• Transitioned from a traditional oil and gas company to focus on a large industrial gas resource in Montana, including significant helium and CO2 assets, fully owned and operated.

• Asset base includes a 50+ year producing industrial gas field and a large oil field, with potential for 150 years of production.

• Developed a carbon management business supported by bipartisan legislation, leveraging CO2 sequestration.

• Monetized non-core assets and redeployed capital into the Montana project over the past two years.

• Project economics driven by higher multiples in industrial gas versus traditional oil and gas, with strong infrastructure moats.

Revenue model and operational plan

• Three integrated revenue streams: helium sales, CO2 sequestration (with federal tax credits), and oil production.

• Helium sold via long-term offtake agreements; CO2 captured and either sequestered for credits or used for enhanced oil recovery.

• Projected $130 million in Section 45Q tax credits over 12 years for CO2 sequestration.

• Initial revenue mix is about half oil, half industrial gas and carbon management, shifting toward gas as production scales.

• Signed a 100% take-or-pay helium offtake agreement with the world’s largest industrial gas company, ensuring revenue certainty.

Financial structure and scalability

• Deployed ~$30 million to date, with ~$20 million remaining for phase I; forecasted 40% unlevered return on capital employed for phase I.

• Fully funded for phase I through equity and amended project finance debt; running at low leverage with future opportunities to optimize capital structure.

• Potential to pull forward $50–$70 million from tax equity financing by selling a portion of tax credits at a discount.

• Platform designed for scalability, with infrastructure supporting significant expansion and EBITDA growth to $45–$60 million over 4–6 years.

• Board and management own 27% of equity, aiming to minimize dilution as the project scales.