U.S. Energy Corp. Receives Marketable Securities in Enterra Energy Trust
16 Junho 2006 - 4:07PM
PR Newswire (US)
RIVERTON, Wyo., June 16 /PRNewswire-FirstCall/ -- U.S. Energy Corp.
(NASDAQ:USEG) ("the Company"), a natural resources exploration and
development company, today announced that the transfer agent for
Enterra Energy Trust has issued to U.S. Energy Corp. new
certificates in the amount 436,586 Enterra Energy Trust Units,
which trade on the Toronto Stock Exchange ("ENT-UN.TO"). The Units
also trade on the New York Stock Exchange ("ENT"), where they
closed on June 15, 2006 at a price of $13.65 (US). Crested Corp.,
(OTC:CBAG) (BULLETIN BOARD: CBAG) , which is a 70.1%-owned
subsidiary of U.S. Energy Corp., has also been issued 245,759 units
of Enterra Energy Trust. U.S. Energy Corp. and Crested Corp.
received 682,345 exchangeable units of Enterra Energy Trust as
partial payment upon the sale of Rocky Mountain Gas, Inc., a
coalbed methane subsidiary previously owned by U.S. Energy Corp.
and Crested Corp., to Enterra in June 2005. The non-marketable
units originally received have now been exchanged for a like number
of Enterra Energy Trust Units that trade on the New York and
Toronto stock exchanges. The units owned by U.S. Energy Corp.
currently have a market value of approximately $6.0 million (US),
while the units owned by Crested Corp. are valued at approximately
$3.4 million (US). Keith Larsen, CEO of USEG commented, "U.S.
Energy does not have any immediate plans to sell its Enterra units,
as our liquidity remains strong. For each of the first six months
of this year, Enterra has been paying a cash dividend of $0.18 per
month per unit. Based on yesterday's closing market price, this
represents an annual return of 15.8%, assuming that future
distributions continue at the current rate. Our current assets at
March 31, 2006 approximated $6.7 million. The now-liquid Enterra
Units further strengthen U.S. Energy Corp.'s balance sheet and
enhance the Company's ability to exploit the value inherent in its
uranium and molybdenum assets." "While many commodities have
decreased in price over the last several weeks, both uranium and
molybdenum prices have traded higher, reflecting the likelihood
that markets for these commodities will remain tight," continued
Larsen. "In particular, we expect uranium prices to trend higher
during the second half of 2006, due to limited supply availability.
Our plans to resume production at the Shootaring uranium mill in
Utah are moving forward, and we expect to announce a decision soon
regarding the commencement of a bankable feasibility study for the
Lucky Jack molybdenum project in southwestern Colorado." ABOUT U.S.
ENERGY CORP. AND CRESTED CORP. U.S. Energy Corp. and its
majority-owned subsidiary, Crested Corp., are engaged in a joint
venture to conduct various business operations as USECC. Through
their subsidiaries, Sutter Gold Mining Inc., Plateau Resources
Limited, Inc., U.S. Moly Corp, U.S. Uranium Ltd. and USECC, they
own various interests or properties prospective for gold, uranium,
vanadium and molybdenum. This news release includes statements
which may constitute "forward-looking" statements, usually
containing the words "believe," "estimate," "project," "expect," or
similar expressions. These statements are made pursuant to the safe
harbor provision of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to,
future trends in mineral prices, the availability of capital,
competitive factors, and other risks. The profitable mining and
processing of uranium and vanadium will depend on many factors:
Obtaining properties in proximity to the Shootaring mill in
southeastern Utah to keep transportation costs economic;
delineation through extensive drilling and sampling of sufficient
volumes of mineralized material, with sufficient grades, to make
mining and processing economic over time; continued sustained high
prices for uranium oxide and vanadium; obtaining the capital
required to upgrade the Shootaring mill and add a vanadium circuit,
and obtaining and continued compliance with operating permits. The
profitable mining and processing of gold will depend on many
factors, including receipt of final permits and keeping in
compliance with permit conditions; delineation through extensive
drilling and sampling of sufficient volumes of mineralized
material, with sufficient grades, to make mining and processing
economic over time; continued sustained high prices for gold, and
obtaining the capital required to initiate and sustain mining
operations, and build and operate a gold processing mill. We have
not yet obtained feasibility studies on any of our mineral
properties. These studies would establish the economic viability,
or not, of the different properties based on extensive drilling and
sampling; the design and costs to build and operate gold and
uranium/vanadium mills; the cost of capital, and other factors.
Feasibility studies can take many months to complete. We have not
established any reserves (economic deposits of mineralized
materials) on any of our uranium/vanadium or gold properties, and
future studies may indicate that some or all of the properties will
not be economic to put into production. The molybdenum property has
had extensive work conducted by prior owners to establish the
deposits of molybdenum, mine planning and other ancillary
activities. This data will have to be updated to determine the
viability of starting mining and milling operations. Obtaining
mining and other permits to begin mining the molybdenum property
may be very difficult, and, like any mining operation, capital
requirements for a molybdenum mining operations will be
substantial. By making these forward-looking statements, the
Companies undertake no obligation to update these statements for
revision or changes after the date of this release. DISCLOSURE
REGARDING MINERAL RESOURCES UNDER SEC AND CANADIAN REGULATIONS USE
is a joint venture partner with Uranium Power Corp. ("UPC") and a
major shareholder of SGMI. The common stock of UPC and SGMI, both
Canadian corporations, are traded on the TSX-V, and are subject to
the reporting requirements of the TSX-V and Canadian securities
regulatory authorities. Harold F. Herron, Senior Vice President and
Director of USE and Crested, serves on the board of directors of
SGMI and is also the Company's President and CEO. Chris Healey,
Vice President Exploration of USE, serves on the board of directors
of UPC. From time to time, UPC and SGMI make public disclosures in
compliance with National Instrument 43-101, "Standards of
Disclosure for Mineral Properties." NI 43-101 establishes
procedures and standards for determining the existence of, and the
reporting of, Mineral Resources and Mineral Reserves. Mineral
Resources are classified in ascending categories of geological
confidence, as Inferred, Indicated, and Measured. Each definition
relates to a resource that is determined to be of "such a grade or
quality that it has reasonable prospects for economic extraction."
Mineral Reserves are classified as Proven or Probable. The SEC
allows public disclosure of the extent and grade of mineral
deposits, and, under SEC Industry Guide 7, "Description of Property
by Issuers Engaged or to be Engaged in Significant Mining
Operations, of Proven (Measured) Reserves and Probable (Indicated)
Reserves. In contrast to NI 43-101, the SEC does not allow public
disclosure of Inferred, Indicated, or Measured Resources. In
addition, there are some significant differences in the standards
allowed, and the procedures required to be followed by the SEC for
public disclosure of the SEC's Proven (Measured) Reserves and
Probable (Indicated) Reserves, as compared to NI 43-101 for Proven
and Probable Mineral Reserves." United States residents, who obtain
information about those of our uranium properties, and about the
gold properties, which are reported upon by UPC and SGMI to the
TSX-V in accordance with NI 43-101, and about SGMI's gold
properties, are cautioned that such information may be materially
different from what would be permitted under SEC rules for United
States companies. DATASOURCE: U.S. Energy Corp. CONTACT: Keith G.
Larsen, CEO, or Mark Larsen, President, both of U.S. Energy Corp.,
+1-307-856-9271
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