As
filed with the Securities and Exchange Commission on October 20,
2009
Registration
No. 333-_____________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
FORM
S-3
Registration
Statement
Under
the Securities Act of 1933
U.S.
ENERGY CORP.
(Exact
name of registrant as specified in its charter)
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Wyoming
(State
or other jurisdiction of incorporation or organization)
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83
0205516
(I.R.S.
Employer Identification Number)
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877
North 8th West,
Riverton,
Wyoming 82501
(307)
856-9271
(Address,
including zip code, and telephone number, including area code, of
registrant’s principal executive offices)
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Steven
R. Youngbauer
877
North 8th West,
Riverton,
Wyoming 82501
(307)
856-9271
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
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Copy
to:
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Stephen
E. Rounds, Esq.
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The
Law Office of Stephen E. Rounds
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1544
York Street, Suite 110,
Denver,
CO 80206
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Tel: (303)
377-6997; Fax: (303) 377-0231
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_______________
Approximate date of commencement of
proposed sale to the public: From time to time after the
effective date of this registration statement as determined by the
registrant.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
[ ]
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
If this
Form is a registration statement pursuant to General Instruction 1.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [ ]
If this
Form is a post effective amendment to a registration statement filed pursuant to
General Instruction 1.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer ¨ Accelerated
filer ý
Non-accelerated
filer (do not check if a smaller reporting company) ¨ Smaller
reporting Company ¨
CALCULATION
OF REGISTRATION FEE
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Title
of each class of securities to be registered(1)
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Amount
to be registered(1)
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Proposed
maximum offering price per unit(1)
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Proposed
maximum aggregate offering price(1)
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Amount
of registration fee
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Common
Stock (2)
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___________
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__________
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$100,000,000
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$5,580.00
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(1)
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The
registrant is registering an indeterminate number of the identified
securities up to a proposed maximum aggregate offering price of
$100,000,000, which may be offered from time to time at indeterminate
prices. The registrant has estimated the proposed maximum
aggregate offering price solely for the purpose of calculating the
registration fee pursuant to Rule 457(o) under the Securities
Act.
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(2)
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Includes
the preferred share purchase rights (as adjusted and as subject to further
adjustment in certain events, including stock splits, stock dividends or
similar transactions) associated with the common
stock.
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The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
-2-
SUBJECT TO COMPLETION, DATED OCTOBER
__, 2009
The
information in this prospectus is not complete and may be changed. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement filed with the Securities and Exchange Commission
becomes effective. This prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state or other
jurisdiction where the offer or sale is not permitted.
Prospectus
U.S.
Energy Corp.
Common
Stock
From time
to time, U.S. Energy Corp. may offer to sell shares of common
stock. We will provide the specific terms of any offering in
supplements to this prospectus. Any prospectus supplement may also
add, update or change information contained in this prospectus. You
should read this prospectus and any accompanying prospectus supplement carefully
before making your investment decision.
We may
offer shares through underwriters, dealers, or agents, directly to other
purchasers and/or through a combination of any such methods of
sale. The prospectus supplement for each offering will describe in
detail the plan of distribution for that offering, including the offering
prices. For general information about the distribution of securities
offered, please see “Plan of Distribution” in this prospectus.
Our
common stock is listed on the NASDAQ Capital Market under the trading symbol
“USEG.” The closing per share price of our common stock on the NASDAQ Capital
Market on October 19, 2009 was $6.79.
This
prospectus may not be used to sell securities unless accompanied by a prospectus
supplement.
Investing
in our securities involves risks. You should carefully read and consider the
Risk Factors beginning on page 1 of this prospectus as well as any risk factors
included in our periodic reports, in any prospectus supplements relating to
specific offerings, and in other documents that we file with the Securities and
Exchange Commission.
Neither the Securities and Exchange
Commission, nor any state securities commission or any other regulatory body has
approved or disapproved of these securities or determined if this prospectus
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.
The date
of this prospectus is ______________, 2009
TABLE
OF CONTENTS
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Page
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No.
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About
this Prospectus
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i
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Where
You Can Find More Information
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ii
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Incorporation
of Certain Information by Reference
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ii
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Cautionary
Statement Regarding Forward-Looking Statements
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iii
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The
Company
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1
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Risk
Factors
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1
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Use
of Proceeds
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10
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Description
of Capital Stock
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10
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Plan
of Distribution
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11
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Legal
Matters
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13
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Experts
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13
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we have filed with the U.S.
Securities and Exchange Commission (“SEC”) using a “shelf” registration
process. Using this process, we may offer any of the securities
described in this prospectus in one or more offerings up to a total offering
price of $100,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we use this
prospectus to offer securities, we will provide a prospectus supplement that
will describe the specific terms of the offering. The prospectus
supplement and any pricing supplement may also add to, update or change the
information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and any prospectus
supplement, you should rely on the information in the prospectus
supplement. Please carefully read this prospectus and the
accompanying prospectus supplement, in addition to the information contained in
the documents we refer to under the headings “Where You Can Find More
Information” and “Incorporation of Certain Information by
Reference.”
You
should rely only on the information contained in this document or incorporated
by reference in this prospectus and any accompanying prospectus supplement. We
have not authorized any other person to provide you with different
information. If anyone provides you with different information, you
should not rely on it. We are not making an offer of the securities
covered by this prospectus in any state where the offer is not
permitted. You should assume that the information appearing in this
prospectus, any prospectus supplement and any other document incorporated by
reference is accurate only as of the date on the front cover of those
documents. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This
prospectus may not be used to sell securities unless it is accompanied by a
prospectus supplement that describes those securities.
Unless
otherwise indicated or unless the context otherwise requires, all references in
this prospectus to “U.S. Energy,” “USE,” the “Company,” “we,” “us,” and “our”
mean U.S. Energy Corp. and its wholly owned subsidiaries.
-i-
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed a registration statement on Form S-3 with the Securities and Exchange
Commission in connection with this offering. We file annual,
quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy the
registration statement and any other documents we have filed at the Securities
and Exchange Commission’s Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the Public Reference
Room. Our filings are also available to the public at the Securities and
Exchange Commission’s Internet site at http://www.sec.gov.
This
prospectus is part of the registration statement and does not contain all of the
information included in the registration statement. Whenever a reference is made
in this prospectus to any of our contracts or other documents, the reference may
not be complete. The complete text of such contracts and documents
are exhibits to the registration statement, or exhibits to the filings
incorporated by reference. Please see “Incorporation of Certain
Information by Reference” below.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
Securities and Exchange Commission allows us to “incorporate by reference” into
this prospectus other information we file with the Commission. This
means that we can disclose important information to you by referring you to
those documents. Information incorporated by reference is part of
this prospectus, except for any information that is superseded by information
included directly in this prospectus. Later information filed with the
Securities and Exchange Commission will update and supersede this
information.
We also
incorporate by reference into this prospectus any future filings we make with
the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of the initial
registration statement and prior to its effectiveness. In addition,
we incorporate by reference the documents listed below and any future filings we
make with the Commission under Sections13(a), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus until the offering is
completed.
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our
annual report on Form 10-K for the twelve months ended December 31, 2008
filed with the SEC on March 13, 2009, as amended on April 2,
2009;
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our
quarterly reports on Form 10-Q for the three months ended March 31, 2009
filed with the SEC on May 8, 2009 and for the quarter ended June 30, 2009
filed with the SEC on August 7,
2009.
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Forms
8-K filed with the SEC January 8, 2009, January 12, 2009, January 20,
2009, February 4, 2009, March 4, 2009, March 16, 2009, March 19, 2009,
April 1, 2009, April 21, 2009, May 11, 2009, May 13, 2009, May 18, 2009,
June 1, 2009, June 8, 2009, June 22, 2009, July 13, 2009, July 27, 2009,
July 30, 2009, August 7, 2009, August 10, 2009, August 26, 2009, August
28, 2009 and October 16, 2009; and
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the
description of our common stock in the Registration Statement on Form
8-A/A filed with the SEC on November 17,
2005.
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-ii-
We will
provide to you copies of these documents, and any exhibits to them, without
charge, upon request addressed to U.S. Energy Corp., 877 North 8th West,
Riverton, Wyoming 82501, attention Steven R. Youngbauer, General Counsel and
Secretary. You also may request these documents by telephone:
1.307.856.9271. We refer you to the registration statement and
exhibits which may be inspected and copied at the Public Reference Section of
the Commission, Public Reference Room, 100 F Street, N.E., Washington,
D.C. 20549, at prescribed rates; the telephone number for the Public
Reference Section is 1.800.SEC.0330. Our internet address is www.usnrg.com; and
these documents (and future filings with the Commission) are accessible through
the link at our Internet address (website) or at
www.sec.gov. Information at our Internet address, other than the
filings made with the Securities and Exchange Commission, is not incorporated
into this prospectus.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The
information discussed in this prospectus (and in any supplement), our filings
with the SEC and our public releases include “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”)
and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). All
statements, other than statements of historical facts, concerning, among other
things, planned capital expenditures, increases in oil and gas production, the
number of anticipated wells to be drilled after the date hereof, future cash
flows and borrowings, pursuit of potential acquisition opportunities, our
financial position, business strategy and other plans and objectives for future
operations, are forward-looking statements.
These
forward-looking statements are identified by their use of terms and phrases such
as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,”
“achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,”
and similar terms and phrases. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, they do involve
certain assumptions, risks and uncertainties. Our results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including, among others:
For oil and
gas:
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general
economic conditions, whether internationally, nationally or in the
regional and local market areas in which we do business, may be less
favorable than expected, including the possibility that the current
economic recession in the United States will be severe and prolonged,
which could adversely affect the demand for oil and natural gas and make
it difficult, if not impossible, to access financial
markets;
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our
ability to generate sufficient cash flow from operations, borrowings or
other sources to enable us to fully develop our undeveloped acreage
positions;
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the
volatility in commodity prices for oil and natural gas, including
continued declines in prices, which would have a negative impact on
operating cash flow and could require us to take additional ceiling test
write-downs;
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the
possibility that the oil and gas industry may be subject to future
regulatory or legislative actions (including changes to existing tax rules
and regulations and changes in environmental
regulation);
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exploration
and development risks, and drilling and operating
risks;
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the
presence or recoverability of estimated oil and natural gas reserves and
the actual future production rates and associated
costs;
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-iii-
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the
ability to replace oil and natural gas reserves;
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environmental
risks;
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availability
of pipeline capacity and other means of transporting crude oil and natural
gas production; and
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competition,
including competition for participation in drilling programs with
operating companies, resulting in less favorable terms for
participation.
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For the molybdenum
property:
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the
ability to obtain permits required to initiate mining and processing
operations, and Thompson Creek Metals’ continued participation as operator
of the property.
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completion
of a feasibility study based on a comprehensive mine plan, which indicates
that the property warrants construction and operation of mine and
processing facilities, taking into account projected capital expenditures
and operating costs in the context of molybdenum price
trends.
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For the geothermal
activities:
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the
ability to acquire additional BLM and other acreage positions in targeted
prospect areas, obtain required permits to explore the acreage, drill
development wells to establish commercial geothermal resources, and the
ability of Standard Steam Trust LLC to access third-party capital to
reduce reliance on capital calls to its members (including U.S. Energy
Corp.)) for continued
operations.
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Finally,
our future results will depend upon various other risks and uncertainties,
including, but not limited to, those detailed in our filings with the SEC that
are incorporated by reference herein and in the section entitled “Risk Factors”
included elsewhere in this prospectus (and in any supplement). For additional
information regarding risks and uncertainties, please read our filings with the
SEC under the Exchange Act and the Securities Act, including our most recent
annual report on Form 10-K and our subsequent quarterly reports on Form
10-Q. All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary
statements in this paragraph and elsewhere in this prospectus (and in any
supplement) and in the documents incorporated by reference. Other than as
required under securities laws, we do not assume a duty to update these
forward-looking statements, whether as a result of new information, subsequent
events or circumstances, changes in expectations or
otherwise. Forward-looking statements made in information
incorporated by reference speak only as of the dates such statements were
made.
-iv-
THE
COMPANY
U.S.
Energy Corp. is a natural resources exploration and development company with
interests in oil and gas, geothermal, molybdenum, and real estate
assets. We own: (i) non-operated oil and gas properties in
the Gulf Coast area and the Williston Basin (developed and undeveloped); (ii)
geothermal resources in several Western states (through an investment in
privately-held Standard Steam Trust LLC (“SST”) (we have two representatives on
SST’s advisory board)); (iii) the Mount Emmons molybdenum property in Colorado
(managed by our industry partner, Thompson Creek Metals Company (USA); and (iv)
an energy related multifamily apartment project serving the
residential market in Gillette, Wyoming.
Our
principal executive offices are located in the Glen L. Larsen Building at 877
North 8th West, Riverton, Wyoming 82501, telephone 307-856-9271. Our
website is www.usnrg.com. However,
information contained on our website is not part of this
prospectus.
RISK
FACTORS
An
investment in our common stock is speculative in nature and involves a high
degree of risk. When considering an investment in the common stock, you should
carefully consider all of the following risk factors described below and any
similar information contained in any annual report on Form 10-K, quarterly
report on Form 10-Q or other document filed by us with the SEC after the date of
this prospectus that is incorporated by reference in this
prospectus.
Risk
Factors Involving Our Business
The
continued credit crisis and related turmoil in the global financial system may
have an impact on our industry partners and our ability to finance the purchase
of certain oil and gas properties and could put downward pressure on demand and
prices of oil and natural gas, which could adversely impact our financial
position, results of operations and cash flows.
The
continued credit crisis and related turmoil in the global financial system may
have a material impact on the Company’s ability to finance the purchase of
producing or exploratory oil and gas properties. The availability of
credit to the Company’s industry partners may also affect their ability to
continue exploration and development activities. The current economic
situation could also have an impact on the Company’s industry partners, causing
them to fail to meet their obligations to the Company, and on the liquidity of
our operating partners, resulting in delays in operations or failure to make
required payments. Additionally, the current economic situation could
lead to reduced demand for natural gas and oil, or further reductions in the
prices of natural gas and oil, or both, which could have a negative impact on
the Company’s financial position, results of operations and cash
flows. While the ultimate outcome and impact of the current financial
crisis cannot be predicted, it may have a material adverse effect on the
Company’s future liquidity, results of operations and financial
condition.
-1-
Limited
recurring business revenues may constrain future investments, and earnings will
continue to be influenced by transaction events.
At
December 31, 2008, USE had $17.7 million in retained earnings, a loss from
operations (before investment and property transactions) of $9.5 million, and a
gain on the sale of stock in SGMI and marketable securities of $5.4
million. For 2007, we had $19.0 million of retained earnings, a loss
before investment and property transactions of $14.5 million from operations,
and a gain on Investment and Property transactions (uranium properties,
equipment and marketable securities) of $108.8 million. Historically,
significant swings in earnings from year to year has been the nature of our
business model of acquiring, holding and selling mineral properties, because the
process from acquisition until ultimate sale or joint venture is capital
intensive and at times may take years to complete. Although we are
modifying the business to build an asset base that generates recurring revenues,
we do expect to continue experiencing earnings swings as a portion of our assets
still are mid to long-term projects. Examples would be the
acquisition, exploration and development of oil and gas properties, the
multifamily housing complex in Gillette, Wyoming, the geothermal program, and
the Mount Emmons molybdenum property.
Working
capital at June 30, 2009 and December 31, 2008 was $49.3 million and $52.8
million, respectively. Historically, working capital needs were met
primarily by liquidating investments, selling partial interests in mineral
properties, and selling equity. Our cash on hand as of June 30, 2009
greatly exceeds the amount of cash on hand during prior years, but we may not
have sufficient cash to fully develop our mineral and oil and gas and geothermal
properties. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the 2008 Annual Report and in the June
30, 2009 Quarterly Report. The minerals business offers the
opportunity for significant returns on investment, but the realization of such
returns is subject to many risks, including cash flow risk. As
examples:
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Initial
results from one or more of the oil and gas drilling programs could be
marginal but warrant investing in more wells. Dry holes or over
budget exploration costs or low commodity prices could result in
production revenues below projections, thus adversely impacting cash
expected to be available for continued work in a program, ultimate
projected returns from a program, and a reduction in cash for investment
in other programs.
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Further
investments of cash into the geothermal program may be required to
maintain our 25% interest, although a return on the investment may not be
realized for three to five years. To the extent additional
capital is not obtained from third parties, cash to sustain operations
will have to be raised from current members in Standard Steam Trust LLC
(including the Company) through capital calls, in which event the cash
required to maintain our interest at the 25% level could be
substantial. Failure to fund cash calls will dilute our
position.
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We
are paying the annual costs to operate and maintain the water treatment
plant, approximately $1.7 million, at the Mount Emmons Project until such
time as Thompson Creek Metals elects to acquire an
interest. Thereafter, we would be responsible for paying our
share of plant costs. Even if Thompson Creek Metals elects to
participate in the Mount Emmons Project up to the 75% level, USE
thereafter would be responsible for its 25% share of development and
operating costs after Thompson Creek Metals has expended a total of $400
million on the property.
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-2-
Except
for the projected capital requirements of our drilling program in the Williston
Basin, we believe we have sufficient cash reserves to execute our business plan
in 2009 and subsequent years, assuming our various projects generate revenues as
projected. However, adverse developments in one or more programs
would require a reassessment of priorities and therefore potential
re-allocations of capital. If internal cash from current reserves and
projected revenues are insufficient, we may have to obtain investment capital to
maintain the full range of activities.
Our
business may be impacted by adverse commodity prices.
In 2008
oil prices spiked to a ten year high with a spot price of $133.37 per
barrel. At December 31, 2008, the spot price for oil had declined to
$40.88 per barrel. At September 30, 2009 the price had recovered
somewhat to $70.46 per barrel. Global markets have caused these large
fluctuations in the price of oil. Natural gas prices are historically
volatile, and reached a ten year high during July 2008 on the City Gate at
$12.37 per thousand cubic feet of natural gas. As with oil, the City
Gate price for natural gas declined through the balance of 2008 and was $8.16
per Mcf as of December 31, 2008, and $3.24 per Mcf at September 30,
2009. Molybdenum prices have declined from a ten year high of $38.00
per pound in June 2005 to a ten year low average price of $10.00 per pound in
December 2008. The average price at September 30, 2009 was
$14.00 per pound. The global economic recession may continue to
suppress prices and prices could drop further. Investments in oil and
gas properties generally are recoverable from production or sale of the
properties. However, significant price declines from September 30
levels could decrease anticipated revenues and could impair the carrying value
of our producing properties.
USE
does not have independent reports on the value of some of the mineral
properties.
USE has
not yet obtained a final feasibility study on the Mount Emmons Project or
renewable resource reports for our geothermal properties.
A
feasibility study would establish the potential economic viability of the
molybdenum property based on a reassessment of historical drilling and sampling
data and additional work to be performed; the design and costs to build and
operate a mill; the cost of capital, and other factors. A feasibility
study, conducted by professional consulting and engineering firms, will
determine if the deposits contain proved reserves (i.e., amounts of minerals in
sufficient grades that can be extracted profitably under current commodity
pricing assumptions and estimated development and operating
costs). Geothermal renewable resource reports estimate the energy
potential of geothermal properties in terms of capacity to generate electricity
with plants to be built on the properties in the future.
Oil and
gas reserve reports are prepared internally or by independent consultants to
estimate the quantities of hydrocarbons that can be recovered from proved
producing and proved undeveloped properties, utilizing current commodity prices
and taking into account capital and other expenditures. These reports
also estimate the future net present value of the reserves, and are used for
internal planning purposes and for testing the carrying value of the properties
on our balance sheet.
Potential
industry partners and investors will use such studies and reports to evaluate
doing business with us (for example, continuing or initiating a joint venture
exploration arrangement), and buying or selling our stock.
Reported
information that does not validate the investments already made could alter our
ability to maintain or attract business partners, and depress our stock
price.
-3-
The
development of oil and gas properties involves substantial risks that may result
in a total loss of investment.
The
business of exploring for and developing natural gas and oil properties involves
a high degree of business and financial risks, and thus a significant risk of
investment loss that even a combination of experience, knowledge and careful
evaluation may not be able to overcome. The cost of drilling, completing and
operating wells is often uncertain. Factors which can delay or
prevent drilling or production, or otherwise impact expected results include but
are not limited to:
· unexpected
drilling conditions;
· permitting
with State and Federal agencies;
· easements
from land owners;
· adverse
weather conditions; pressure or irregularities in geologic
formations;
· equipment
failures;
· title
problems;
· fires,
explosions, blowouts, cratering, pollution and other environmental risks or
accidents;
· changes
in government regulations;
· reductions
in commodity prices;
· pipeline
ruptures; and
· unavailability
or high cost of equipment and field services and labor.
A
productive well may become uneconomic in the event that unusual quantities of
water or other non-commercial substances are encountered in the well bore, which
impair or prevent production. We may participate in wells that are
unproductive or, though productive, won’t produce in economic
quantities.
Our
future use of hedging arrangements in oil and gas production could result in
financial losses or reduce income.
We may
engage in hedging arrangements for a significant part of our production to
reduce exposure to price fluctuations in oil and gas prices. These
arrangements would expose us to risk of financial loss in some circumstances,
including when production is less than expected, the counterparty to the hedging
contract defaults on its contract obligations, or there is a change in the
expected differential between the underlying price in the hedging agreement and
the actual price received. In addition, these hedging arrangements may limit the
benefits we would otherwise receive from increases in prices for oil and natural
gas. Currently, there are no hedges for our oil and gas
production.
We
may incur losses as a result of title deficiencies in oil and gas
leases.
Typically,
operators obtain a preliminary title opinion or at least a landman’s evaluation
of title, prior to drilling. To date, our operators have provided
preliminary title opinions prior to drilling. In addition, we rely on
the operators to warrant that title is in order and provide us with ownership of
the interest we pay for. However, from time to time, our operators
may not retain attorneys to examine title, even on a preliminary basis, before
starting drilling operations. If curative title work is recommended
to provide marketability of title (and assurance of payment from production),
but is not successfully completed, a loss may be incurred from drilling even a
productive well because the operator (and therefore USE) would not own the
interest.
-4-
We
could lose our investment in undeveloped oil and gas leases if wells are not
drilled and completed in a timely manner.
Leased
oil and gas properties provide the holder with the right to drill and complete
wells in a timely manner. If a well is drilled and completed, the
lease term continues so long as there is production from the
well. However, renewing leases on undrilled expired acreage may not
be feasible due to increased cost or other reasons. If the operator
is unable to renew leases on undrilled acreage, we would have to write off the
initial acquisition cost.
Oil
and gas operations are subject to environmental regulations that can materially
adversely affect the timing and cost of operations.
Oil and
gas exploration and production are subject to certain federal, state and local
laws and regulations relating to environmental quality and pollution control.
These laws and regulations increase costs and may prevent or delay the
commencement or continuance of operations. Specifically, the industry generally
is subject to legislation regarding the acquisition of permits before drilling,
restrictions on drilling activities in restricted areas, emissions into the
environment, water discharges, and storage and disposition of hazardous
wastes. In addition, legislation has been enacted which requires well
and facility sites to be abandoned and reclaimed to the satisfaction of state
authorities. Such laws and regulations have been frequently changed in the past,
and we are unable to predict the ultimate cost of compliance as a result of
future changes. The adoption or enforcement of stricter regulations could have a
significant impact on our operating costs.
Estimated
reserves are based on many assumptions. Any material inaccuracies in reserve
estimates or underlying assumptions will materially affect the quantities and
present value of the reserves.
The 2008
Annual Report contains estimates of natural gas and oil reserves, and the future
net cash flows attributable to those reserves, prepared by independent petroleum
engineers. There are uncertainties inherent in these estimates, including
factors beyond our control. Reserve engineering is a subjective process of
estimating underground accumulations of natural gas and oil that cannot be
measured in an exact manner. The accuracy of the estimates is a function of: (1)
the available data; (2) the accuracy of assumptions regarding future natural gas
and oil prices and future development and exploitation costs and activities; and
(3) engineering and geological interpretation and judgment.
Reserves
and future cash flows may be subject to material downward or upward revisions in
the future, based upon production history, development activities, and commodity
prices. Actual future production, revenue, taxes, development
expenditures, operating expenses, quantities of recoverable reserves and value
of cash flows from those reserves may vary significantly from the
estimates. Any significant variance from the assumptions used in
making estimates could greatly affect the estimates as well as the
classification of reserves based on risk of recovery.
The
estimated quantities of proved reserves and the discounted present value of
future net cash flows attributable to those reserves included herein were
prepared by engineers in accordance with SEC rules, and are not intended to
represent their fair, or current, market value.
-5-
Estimated
discounted future net cash flows from proved reserves are based on commodity
prices and operating and other costs. Actual future net cash flows,
however, also will be affected by factors such as:
· geological
conditions;
· changes
in government regulations and taxation;
· assumptions
about future prices;
· the
amount and timing of actual production;
· future
operating costs; and
· capital
costs to drill new wells, where applicable.
The
timing of production, and when development and production costs are incurred,
will affect the timing of actual future net cash flows, and therefore their
present value. In addition, the 10% discount factor may not be the most
appropriate discount based on interest rates in effect from time to
time.
There
are risks associated with the geothermal program.
To
complete our geothermal project business plan through acquisition of land
positions in numerous prospects and establishing the power potential through
drilling will require substantial capital. While we intend to
continue investing through the partnership’s capital calls, and may decline any
capital call without penalty, non-participation would dilute our current 25%
interest. Notwithstanding the current increase of interest in
geothermal power generally, SST may be unable to raise sufficient capital from
new investors due to the condition of the global financial
markets. In that event, the project might have less than the optimum
number of prospects and/or be unable to establish prospective value through
drilling. This could result in an increase in the already substantial
risks associated with our investment in the entity or geothermal
prospects.
All the
prospects are undeveloped. Initial value will be established only by
drilling at least three wells, at substantial expense, on each prospect that
demonstrate sufficient water temperature and flow to support a commercial power
plant. Even if resources are drilling-validated as to power
potential, realization of our investment will depend on the sale of our
partnership equity, or the partnership’s sale of the properties to a utility,
energy company, or other investor, or construction of a power plant (which will
require institutional financing) and sale of electricity to
utilities.
Compliance
with environmental regulations may be costly.
General
USE’s
business is regulated by government agencies. Permits are required to
explore for minerals, operate mines and build and operate processing plants, and
drill and operate oil and gas wells. The regulations under which
permits are issued change from time to time to reflect changes in public policy
or scientific understanding of issues. If the economics of a project
cannot withstand the cost of complying with changed regulations, USE might
decide not to move forward with the project.
-6-
USE must
comply with numerous environmental regulations on a continuous basis, to comply
with United States environmental laws, including the National Environmental
Policy Act (“NEPA”), Clean Air Act, the Clean Water Act, and the Resource
Conservation and Recovery Act (“RCRA”). For example, water and dust
discharged from mines and tailings from prior mining or milling operations must
be monitored and contained and reports filed with federal, state and county
regulatory authorities. Additional monitoring and reporting is
required by state and local regulatory agencies. Other laws impose
reclamation obligations on abandoned mining properties, in addition to or in
conjunction with federal statutes. Environmental regulatory programs
create potential liability for operations, and may result in requirements to
perform environmental investigations or corrective actions under federal and
state laws and federal and state Superfund requirements.
Risks
associated with development of the Mount Emmons Project.
The Mount
Emmons molybdenum property is located on fee property within the boundary of
U.S. Forest Service (“USFS”) land. Although mining of the mineral
resource will occur on the fee property, associated ancillary activities will
occur on USFS land. USE and Thompson Creek Metals expect to submit a
Plan of Operations to the USFS in 2010 for USFS approval, which must be approved
before initiating construction, and mining and processing can
occur. Under the procedures mandated by the National Environmental
Protection Act (“NEPA”), the USFS will prepare an environmental analysis in the
form of an Environmental Assessment and/or and Environmental Impact Statement to
evaluate the predicted environmental and socio-economic impacts of the proposed
development and mining of the property. The NEPA process provides for
public review and comment of the proposed plan.
The USFS
is the lead regulatory agency in the NEPA process, and coordinates with the
various Federal and State agencies in the review and approval of the Plan of
Operations. Various Colorado state agencies will have
primary jurisdiction over certain areas. For example, enforcement of
the Clean Water Act in Colorado is delegated to the Colorado Department of
Public Health and Environment and a water discharge permit under the National
Pollution Discharge Elimination System (“NPDES”) is required before the USFS can
approve the Plan of Operations. We currently have a NPDES Permit from
the State of Colorado for the operation of the water treatment plant, however
this permit may need to be updated.
In
addition, the Colorado Division of Reclamation, Mining and Safety issues mining
and reclamation permits for mining activities, pursuant to the Colorado Mined
Land Reclamation Act, and otherwise exercises supervisory authority over mining
in the state. As part of obtaining a permit to mine, USE and Thompson
Creek Metals will be required to submit a detailed reclamation plan for the
eventual mine closure, which must be reviewed and approved by the
agency. In addition, USE and Thompson Creek Metals will be required
to provide financial assurance that the reclamation plan will be achieved (by
bonding and/or insurance) before the mining permit will be issued.
Obtaining
and maintaining the various permits for the mining operations at the Mount
Emmons Project will be complex, time-consuming, and
expensive. Changes in a mine’s design, production rates, quality of
material mined, and many other matters, often require submission of the proposed
changes for agency approval prior to implementation. In addition,
changes in operating conditions beyond our and Thompson Creek Metals’ control,
or changes in agency policy and Federal and State laws, could further affect the
successful permitting of the mine operations.
Although
we are confident that the Plan of Operations for Mount Emmons will ultimately be
approved by the USFS, the timing and cost, and ultimate success of the mining
operation cannot be predicted.
-7-
Although
we are confident that we will obtain the permits needed for the Mount Emmons
Project to move forward, the timing and cost, and ultimate success of the mining
operation cannot be predicted.
Reliance on Thompson Creek
Metals. Thompson Creek Metals is the operator of the Mount
Emmons Project and has an option to acquire up to a 75% interest by performing
and paying for the work to get the project permitted and operational, and making
option payments. Though we believe Thompson Creek Metals is committed
to the Mount Emmons on a long term basis as a major mine project for future
supply, in spite of recent volatility in commodity prices, Thompson Creek could
exit our agreement at any time without penalty. Should we be unable
to find a replacement partner in due course, U.S. Energy Corp. would have to
fund the considerable permitting and development costs thereafter.
We
depend on key personnel.
Our
employees have experience in dealing with the exploration and financing of
mineral properties. We have a very limited staff and executive group,
and rely on third party consultants for professional geophysical and geological
advice in oil and gas matters, and on Thompson Creek Metals for mining
expertise. We do not presently intend to hire professional
geophysicists and geologists. The loss of key employees could
adversely impact our business, as finding replacements is difficult as a result
of competition for experienced personnel in the minerals industry.
We
may be classified as an inadvertent investment company.
We are
not engaged in the business of investing, reinvesting, or trading in securities,
and we do not hold ourselves out as being engaged in those activities. However,
under the federal Investment Company Act of 1940 (“1940 Act”), a company may
fall within the scope of being an “inadvertent investment company” under section
3(a)(1)(C) of the 1940 Act if the value of its investment securities is more
than 40% of its total assets (exclusive of government securities and cash
items).
As a
result of the 2007 sale of uranium assets to Uranium One, we received investment
securities (stock in Uranium One) with a value in excess of 40% of the value of
our total assets. All of this stock was sold in 2007.
An
inadvertent investment company can avoid being classified as an investment
company if it can rely on one of the exclusions under the 1940
Act. One such exclusion, Rule 3a-2 under the 1940 Act, allows an
inadvertent investment company (as a “transient investment company”) a grace
period of one year from the date of classification (in our case, April 30,
2008), to seek to comply with the 40% limit, or with any other available
exclusion. Accordingly, we have taken actions to comply with this 40% limit.
These actions included liquidating investment securities as necessary to stay
within the 40% limit.
Since
Rule 3a-2 is available to a company no more than once every three years, and
assuming no other exclusions were available to us, we would have to keep within
the 40% limit through April 30, 2010. In any event, we do not intend to become
an intentional investment company (i.e. engaging in investment and trading
activities in investment securities), even after April 30, 2010.
Classification
as an investment company under the 1940 Act requires registration with the SEC.
If an investment company fails to register, it would have to stop doing almost
all business, and its contracts would become voidable. Registration is time
consuming and restrictive, and we would be very constrained in the kind of
business we could do as a registered investment company.
-8-
Risks
Relating to USE Stock
USE
may issue shares of preferred stock with greater rights than its common
stock.
Although
we have no current plans, arrangements, understandings or agreements to do so,
USE’s articles of incorporation authorize the board of directors to issue one or
more series of preferred stock and set the terms of the stock without seeking
approval from holders of the common stock. Preferred stock that is
issued may have preferential rights over the common stock, in terms of
dividends, liquidation rights and voting rights.
Future
equity transactions, including exercise of options or warrants, could result in
dilution; and registration for public resale of the common stock in these
transactions may depress stock prices.
From time
to time, USE has sold restricted stock and warrants and convertible debt to
investors in private placements conducted by broker-dealers, or in negotiated
transactions. Because the stock was issued as restricted, the stock
was sold at a discount to market prices, and/or the debt-to-stock conversion
price was at or lower than market. These transactions caused dilution to
existing shareholders. Also, from time to time, options and warrants
are issued to employees, directors and third parties as incentives, with
exercise prices equal to market prices at dates of issuance. Exercise
of in-the-money options and warrants could result in dilution to existing
shareholders.
Although
we do not presently intend to do so, we may seek to raise capital from the
equity markets using private placements at discounted prices, which
could result in dilution to existing shareholders.
Dividends on USE
common stock.
We
declared a onetime special cash dividend of $0.10 per share on all the common
stock in July 2007. We may declare dividends in the future
but we expect to retain the majority of earnings and cash to fund investments
and business development.
USE’s
take-over defense mechanisms could discourage some advantageous
transactions.
We have
adopted a shareholder rights plan, also known as a poison pill. The
plan is designed to discourage a takeover of USE at an unfair
price. However, it is possible that the board of directors and a
potential takeover acquirer would not agree on a higher price, in which case the
takeover might be abandoned, even though the takeover price might be at a
significant premium to market prices. Therefore, as a result of the
mere existence of the plan, shareholders may not receive the premium
price.
Our
stock price likely will continue to be volatile due to several
factors.
In the
two years ended December 31, 2008, USE’s stock has traded as high as $6.79 per
share and as low as $1.52 per share. The principal factors which have
contributed to this volatility have been:
· price and
volume fluctuations in the stock market generally;
· relatively
small amounts of USE stock trading on any given day;
· fluctuations
in USE’s financial operating results; and
· price
swings in the minerals commodities markets.
These
factors may continue to be influential on our stock price.
-9-
USE
OF PROCEEDS
Unless we
specify otherwise in an accompanying prospectus supplement, we expect to use the
net proceeds we receive from sale of the securities offered by this prospectus
for general corporate purposes, including working capital, for oil and gas
exploration and development, geothermal property acquisition and development,
and costs associated with maintenance and permitting work for the molybdenum
property.
The
actual application of proceeds from the sale of any securities issued hereunder
will be described in the applicable prospectus supplement relating to such sale
of securities. We may invest funds not required immediately for these
purposes in Treasury Bills. The precise amount and timing of the
application of these proceeds will depend upon our funding requirements and the
availability and cost of other funds.
DESCRIPTION
OF CAPITAL STOCK
Common
Stock
We are
authorized by our articles of incorporation to issue an unlimited number of
shares of common stock, $0.01 par value. As of October 15, 2009,
there were issued and outstanding 21,309,058 shares of our common
stock.
Shares of
common stock may be issued for such consideration and on such terms as
determined by the board of directors, without shareholder approval. Holders are
entitled to receive dividends when and as declared by the board of directors out
of funds legally available therefor. There are no restrictions on payment of
cash dividends. USE declared a onetime special cash dividend of $0.10
per share on all the common stock on the record date of July 6,
2007. We may declare dividends in the future but we expect to retain
the majority of earnings and cash to fund investments and business development.
All holders of shares of common stock have equal voting rights, and the shares
of common stock sold in this offering will have the same rights. Holders of
shares of common stock are entitled to one vote per share on all matters upon
which such holders are entitled to vote, and further have the right to cumulate
their votes in elections of directors. Cumulation means multiplying
the number of shares held, by the number of nominees to the board of directors,
then voting the resulting number of votes among the nominees as desired.
Directors are elected by a plurality of the votes cast.
Stockholder
Rights Plan
We have
adopted a shareholder rights plan (referred to as the "rights plan") pursuant to
the Rights Agreement. The purpose of the rights plan is to deter an
unfairly low priced hostile takeover of us and by encouraging a hostile party to
negotiate a fair offer with our board of directors and thus eliminate the poison
pill.
Under the
rights plan, the holder of each share of common stock has a right which becomes
exercisable under certain circumstances, including when beneficial ownership of
our common stock by any person (other than an exempt person), alone or together
with all affiliates or associates of the person, of 15% or more of the general
voting power. Each right entitles the registered holder to purchase
(when the rights become exercisable) from us one-one thousandth (1/1,000th) of
one (1) share of Series P Preferred Stock at a price of $200.00 for such one-one
thousandth (1/1,000th) share of such preferred stock, subject to adjustment
under certain circumstances.
-10-
The
rights trade with the common stock and are not separable therefrom; no separate
certificate for the rights is issued unless and until there is a hostile
takeover attempted, after which time separate and tradable rights certificates
would be issued. No shares of Series P Preferred Stock have been
issued by us.
The
rights are not exercisable and never can be unless and until the earlier of (i)
ten business days after beneficial ownership of our common stock by any person
(other than an exempt person), alone or together with all affiliates or
associates of the person, with 15% or more of the general voting power, or (ii)
the tenth business day (or such later date as our board of directors shall
determine) after the date a person (other than an exempt person) commences or
publicly announces an intent by any person (other than an exempt person) to
commence a tender or exchange offer (e.g., a hostile takeover) of us upon the
successful consummation of which such person and its affiliate and associates
would beneficially own 15% or more of our voting stock. If before a
tender offer or exchange offer is launched the hostile party comes to agreement
with the board of directors about price and terms and makes a "qualified offer"
to buy our stock, then the board of directors may redeem (buy back) the rights
for $0.01 each. Under the occurrence of certain circumstances
specified in the rights plan, each holder of a right (other than a holder who
would be deemed to be an acquiring person under the rights plan) will have the
right to receive upon exercise that a number of our common shares (or the
surviving corporation) that have a market value of two times the exercise price
of the right (i.e., common shares will be issued at one-half or 50% of market
value at the time).
Preferred
Stock
We are
authorized by our articles of incorporation to issue up to 100,000 shares of
preferred stock, $0.01 par value. Shares of preferred stock may be
issued by the board of directors with such dividend, liquidation, voting and
conversion features as may be determined by the board of directors without
shareholder approval. We are authorized to issue 50,000 shares of
Series P preferred stock, only in connection with our shareholder rights plan
(see above). No other series or preferred stock has been determined
by the board of directors.
Listing
Shares of
our common stock and rights are listed for trading on the NASDAQ Capital Market
under the trading symbol “USEG.”
PLAN
OF DISTRIBUTION
We may
sell the securities pursuant to this prospectus through underwriters, dealers or
agents, directly to one or more purchasers or through a combination of any such
methods of sale. The underwriters may also sell the securities
directly to other purchasers or through other dealers, who may receive
compensation from the underwriters in the form of discounts, concessions or
commissions.
-11-
The
prospectus supplement relating to any offering of securities may include the
following information:
|
·
|
the
terms of the offer;
|
|
·
|
the
names of any underwriters, dealers or
agents,
|
|
·
|
the
name or names of any managing underwriter or
underwriters;
|
|
·
|
the
purchase price of the securities from
us;
|
|
·
|
the
net proceeds any from the sale of the
securities;
|
|
·
|
any
delayed delivery requirements;
|
|
·
|
any
discounts or concessions allowed or reallowed or paid to dealers;
and
|
|
·
|
any
underwriting discounts, commissions or other items constituting
underwriters’ compensation, and any commissions paid to
agents.
|
Sales through Underwriters or
Dealers
If we use
underwriters in the sale, the underwriters will acquire the securities for their
own accounts. The underwriters may resell the securities from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of
sale. Underwriters may offer securities to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions, and the
underwriters will be obligated to purchase all the offered securities if they
purchase any of them. The underwriters may change from time to time any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers.
During
and after an offering through underwriters, the underwriters may purchase and
sell the securities in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the
offering. The underwriters may also impose a penalty bid, which means
that selling concessions allowed to syndicate members or other broker-dealers
for the offered securities sold for their account may be reclaimed by the
syndicate if the offered securities are repurchased by the syndicate in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the offered securities, which may be
higher than the price that might otherwise prevail in the open market. If
commenced, the underwriters may discontinue these activities at any
time.
If we use
dealers in the sale of securities, we will sell the securities to them as
principals. They may then resell those securities to the public at varying
prices determined by the dealers at the time of resale.
Direct Sales and Sales through
Agents
We may
sell the securities directly. In this case, no underwriters or agents would be
involved. We may sell securities upon the exercise of rights that we may issue
to our securityholders. We may also sell the securities directly to
institutional investors or others who may be deemed to be underwriters within
the meaning of the Securities Act of 1933 with respect to any sale of those
securities.
We may
sell the securities through agents we designate from time to time. Unless we
inform you otherwise in the prospectus supplement, any agent will agree to use
its reasonable best efforts to solicit purchases for the period of its
appointment.
-12-
General
Information
Underwriters,
dealers and agents that participate in the distribution of the offered
securities may be underwriters as defined in the Securities Act of 1933, and any
discounts or commissions received by them from us and any profit on the resale
of the offered securities by them may be treated as underwriting discounts and
commissions under the Securities Act of 1993. Any underwriters or
agents will be identified and their compensation described in a prospectus
supplement.
We may
have agreements with the underwriters, dealers and agents to indemnify them
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or to contribute with respect to payments which the underwriters,
dealers or agents may be required to make.
Underwriters,
dealers and agents may engage in transactions with, or perform services for, us
in the ordinary course of their businesses.
To comply
with the securities laws of certain states, if applicable, the shares must be
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
Any
person participating in a distribution of the securities covered by this
prospectus will be subject to the applicable provisions of the Securities
Exchange Act of 1934 and the rules and regulations
thereunder. Regulation M of the Exchange Act may limit the
timing of purchases and sales of shares. In addition,
Regulation M may restrict the ability of any person engaged in the
distribution of the shares to engage in market-making activities with respect to
our securities for a period of up to five business days before the
distribution.
LEGAL
MATTERS
The
validity of the issuance of the shares offered has been passed upon by The Law
Office of Stephen E. Rounds, Denver, Colorado.
EXPERTS
The
Company’s consolidated balance sheets as of December 31, 2008, and the related
consolidated statements of operations and comprehensive income, stockholders’
equity and cash flows for the year ended December 31, 2008, were audited by Hein
& Associates LLP, and are incorporated by reference in this prospectus and
registration statement along with their report (from the Annual Report on Form
10-K for the twelve months ended December 31, 2008), in reliance upon the
authority of such firm as experts in accounting auditing. The
Company’s consolidated balance sheets as of December 31, 2007 and December 30,
2006, and the related consolidated statements of operations and comprehensive
income, stockholders’ equity and cash flows for each of the years in the two
year-period ended December 31, 2007, were audited by Moss Adams LLP, and are
incorporated by reference in this prospectus and registration statement along
with their report (from the Annual Report on Form 10-K for the twelve months
ended December 31, 2007), in reliance upon the authority of such firm as experts
in accounting and auditing.
Estimates
of the quantities of our estimated proved reserves of oil and gas, future net
income and discounted future net income, effective December 31, 2008, which are
included in this prospectus through incorporation by reference from our annual
report on Form 10-K for the year ended December 31, 2008, were based upon
reports prepared by Ryder Scott Company, L.P., petroleum
engineers. We have incorporated these estimates in reliance on the
authority of such firm as an expert in such matters.
-13-
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table sets forth the costs and expenses payable by the Registrant in
connection with the sale of the securities being registered hereby:
|
Securities
and Exchange Commission registration fee
|
$
|
5,580
|
|
FINRA
filing fees
|
10,500
|
|
|
Accounting
fees and expenses
|
(1)
|
|
|
Legal
fees and expenses
|
(1)
|
|
|
Miscellaneous
|
(1)
|
|
|
Total
|
$
|
(1)
|
(1) Cannot
be estimated at this time.
Item
15. Indemnification of Directors and Officers
Our
articles of incorporation and bylaws provide that we shall indemnify directors
provided that the indemnification shall not eliminate or limit the liability of
a director for breach of the director's duty or loyalty to the corporation or
its stockholders, or for acts of omission not in good faith or which involve
intentional misconduct or a knowing violation of law.
Wyoming
law permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding
brought by third parties by reason of the fact that they were or are directors,
officers, employees or agents of the corporation, if these directors, officers,
employees or agents acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceedings, had no reason to believe their
conduct was unlawful. In a derivative action (i.e., one by or in the right of
the corporation), indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agent in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnify for such expenses despite such
adjudication of liability.
Item
16. Exhibits
(a) The
list of exhibits is incorporated by reference to the Exhibit Index following the
signature pages.
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
-14-
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
Provided
however, that:
Paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) of this section do not apply if the registration statement is on
Form S-3 or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the registration
statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
A. Each
prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
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B. Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a
registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date.
(5) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
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(i)
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Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
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(ii)
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Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
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(iii)
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The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
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(iv)
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Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
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(6) The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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(7) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Riverton, State of Wyoming, on October 20, 2009.
U.S.
ENERGY CORP. (Registrant)
|
Date:
October 20, 2009
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By:
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/s/ Keith
G. Larsen
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|
Keith
G. Larsen, CEO
|
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POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Keith G.
Larson and Mark J. Larsen and each of them, with full power of
substitution and resubstitution and each with full power to act without
the other, his or her true and lawful attorney-in-fact and agent, for him
or her and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to
this Registration Statement and any Registration Statement relating to
this Registration Statement under Rule 462 under the Securities Act of
1933, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange
Commission or any state, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their, his or her
substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities
indicated on the dates indicated below.
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||
|
Date:
October 20, 2009
|
By:
|
/s/ Keith
G. Larsen
|
|
Keith
G. Larsen, Director
|
||
|
Date:
October 20, 2009
|
By:
|
/s/ Mark
J. Larsen
|
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Mark
J. Larsen, Director
|
||
|
Date:
October 20, 2009
|
By:
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/s/ Robert
Scott Lorimer
|
|
Robert
Scott Lorimer,
|
||
|
Principal
Financial Officer/
|
||
|
Chief
Accounting Officer, and Director
|
||
|
Date:
October 20, 2009
|
By:
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/s/ Michael
H. Feinstein
|
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Michael
H. Feinstein, Director
|
||
|
|
||
|
Date:
October 20, 2009
|
By:
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/s/ Al
Winters
|
|
Al
Winters, Director
|
||
|
|
||
|
Date:
October 20, 2009
|
By:
|
/s/ H.
Russell Fraser
|
|
H.
Russell Fraser, Director
|
||
|
Date:
October 20, 2009
|
By:
|
/s/ Michael
Anderson
|
|
Michael
Anderson, Director
|
||
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|
(5)
Exhibits Required to be Filed
|
||
|
Exhibit
No.
|
Title of Exhibit
|
|
|
1.1**
|
Form
of Underwriting or Distribution Agreement
|
|
|
4.1*
|
Restated
Articles of Incorporation as Amended
|
|
|
4.7
|
Bylaws,
as amended through March 17, 2009 (Incorporated by reference from Exhibit
3.2 to the Registrant's Form 10-Q, filed March 19, 2009)
|
|
|
4.8
|
Rights
Agreement dated as of September 19, 2001, amended as of September 30,
2005, between U.S. Energy Corp. and Computershare Trust Company, Inc. as
Rights Agent. (Incorporated by reference to Exhibit 4.1 to the
Registrant's Form 8A/A, filed November 17, 2005)
|
|
|
4.9*
|
Specimen
stock certificate
|
|
|
5.1*
|
Opinion
of The Law Office of Stephen E. Rounds
|
|
|
23.1*
|
Consent
of Hein & Associates LLP, an independent registered public accounting
firm
|
|
|
23.2*
|
Consent
of Moss Adams LP, an independent registered public accounting
firm
|
|
|
23.3*
|
Consent
of Ryder Scott Company, L.P.
|
|
|
23.4
|
Consent
of The Law Office of Stephen E. Rounds (included in Exhibit
5.1)
|
|
|
24.1
|
Power
of Attorney (included on the signature page of the Registration
Statement)
|
|
|
________
|
||
|
* Filed
herewith
|
||
|
** To
be filed by amendment hereto, or as an exhibit to a Form 8-K
Report
and
incorporated by reference herein.
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||
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