U.S. Energy Corp. Q1 FY2026 earnings call

1. Capital structure: Phase one capital stack is complete with an equity offering in March and an amended senior secured credit agreement in April. Equity line of credit has not been drawn since March 2nd and use has been suspended. 2. Execution focus: Focus is on executing Phase 1 after setting the equity capital structure. 3. Path forward: Transitioning from Phase 1 build to operations and positioning for Phase 2. Project finance debt becomes more accessible, 45Q tax credit stream is a potential non-dilutive capital source. Near-term, have capital to deliver Phase 1 into commercial operations in Q1 2027. 4. Operational milestones: MRV approvals anticipated summer, gathering and EOR prep installation summer/fall, plant commissioning end 2026, first gas and revenue Q1 2027. Also advancing commercial discussions on direct merchant CO2 sales. 5. Phase 2: First step in scaling, leverages same infrastructure, acreage, etc., with lower incremental capital required. 6. 45Q tax credit monetization: Credible pathway to monetize significant portion of 45Q credit stream ahead of schedule. 7. Valuation: Small cap E&P, midstream/gas processing, and blue chip industrial gas companies have different market multiples. Once Phase 1 is operating, U.S. Energy is an industrial gas producer with contracted offtake, regulated carbon management, and integrated oil business, trading at a discount to internal NAV. 8. Quarter achievements: Reached FID, executed EPC, completed Phase 1 cap stack, signed five-year take-or-pay helium offtake, construction underway.

1. Near-term: Have capital to deliver Phase 1 into commercial operations in Q1 2027. 2. Phase 2: Working on early stage, focusing on coming up with blueprint and right capital mixture. 3. Capital for Phase 2: Considering project finance layered debt and tax equity financing as avenues.

Q: About CO2 revenue stream outside tax credits, what's been evaluated and info on selling 125,000 million tons per annum outside tax credits?

A: Spot market for CO2 is high. Initial plant captures 125,000+ metric tons a year of CO2. Roughly two thirds is higher purity grade needing incremental capital for industry/food beverage. Started discussions with big players, will pursue heavily in second half of year.

Q: On new helium offtake agreement, pricing and how determined?

A: Offtake agreement signed before Middle East conflict, then reopened negotiations. Pricing is 285 escalates CPI every year over five years, counterparty picks up at plant. Transportation risk avoided with counterparty's infrastructure. Term is five years with revisit pricing after three years.

Q: Update on all in CapEx for projects, spent and left?

A: Initial all in CapEx in low $30 million range. Have made significant dent, another $20 - $25 million left to spend, front-weighted over next two - three months with trickle remaining.

Q: Shut-in opportunities with CutBank field and Montana field office staffing?

A: There are shut-in wells opportunities, some low hanging fruit done adding 40 - 50 barrels a day. Montana has roughly 13 - 15 people running day-to-day operations, familiar with the asset, have field office and equipment yard.

Q: Accelerating to Phase 2, EPA approvals for 45Q credits monetization and hurdles?

A: Phase 2 hurdle is optimal capital stack. Infrastructure costs significant. Working on early stage of Phase 2. Tax equity financing is an avenue to monetize 45Q credits, with comps in market