HOUSTON - U.S. Energy Corp. (NASDAQ:USEG), an energy company with a portfolio of producing assets, has announced the extension of its share repurchase program. The Board of Directors authorized the continuation of the program, which allows for the repurchase of up to $5.0 million of its common stock. Originally set to expire on June 30, 2024, the program will now continue until June 30, 2025.
The company has approximately $4.2 million remaining for future repurchases under the program. The repurchases will occur in the open market or through negotiated transactions, following securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934. However, the timing and amount of the repurchases will be subject to various factors, including the company's capital needs, stock price, market conditions, and other corporate considerations.
Ryan Smith, U.S. Energy's CEO, stated that the continuation of the share repurchase program aligns with the company's capital allocation strategy, which prioritizes growing cash flow and returning cash to shareholders. Smith highlighted the program's benefits, such as market support for the company’s stock, a tax-efficient way to return capital, and accretion to per-share metrics.
The repurchase program may be conducted under a Rule 10b5-1 plan, which allows stock repurchases when the company might otherwise be restricted due to insider trading laws. The company clarified that the program could be suspended, modified, or discontinued at any time due to various factors, including market conditions and the availability of alternative investment opportunities.
This announcement is based on a press release statement from U.S. Energy Corp.
InvestingPro Insights
In light of U.S. Energy Corp.'s (NASDAQ:USEG) recent announcement regarding the extension of its share repurchase program, a deeper look into the company's financial metrics and market performance provides additional context for investors. According to InvestingPro data, U.S. Energy Corp. has a market capitalization of approximately $26.02 million. Despite a challenging market, the company maintains a significant dividend yield of 8.82%, which is particularly attractive to income-focused investors. This aligns with the company's strategy of returning cash to shareholders, as highlighted by CEO Ryan Smith.
However, there are some concerns to consider. The company's price-to-earnings (P/E) ratio stands at -1.81, reflecting its current lack of profitability. This is further substantiated by an adjusted P/E ratio for the last twelve months as of Q3 2023, which is -1.83. Additionally, U.S. Energy Corp. has experienced a revenue decline of -2.07% over the last twelve months, indicating potential headwinds in its operational performance.
InvestingPro Tips suggest that U.S. Energy Corp. stock generally trades with low price volatility, which may appeal to risk-averse investors. However, the company's short-term obligations exceeding its liquid assets and analysts' anticipation that the company will not be profitable this year are critical factors for potential investors to consider. For those interested in a comprehensive analysis, InvestingPro offers additional tips on the company's financial health and future outlook. Currently, there are five more InvestingPro Tips available for U.S. Energy Corp., which can be accessed at https://www.investing.com/pro/USEG. To enrich your investment decision-making, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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