US ENERGY CORP Entering into a material definitive agreement, completing the acquisition or disposition of assets, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant, Disclosure of FD Regulations, Financial Statements and Exhibits (Form 8-K/A)
Section 1.01 Entering into a Material Definitive Agreement.
The disclosures and information set forth in Section 2.01 below in connection with increasing the borrowing base are incorporated by reference into this Section 1.01 in their entirety.
Item 2.01 Completion of Acquisition or Disposal of Assets.
As previously noted in the current Form 8-K report filed by
Pursuant to the EPS, we have agreed to acquire all of the Vendor’s rights and interests in certain operating producing properties aggregating approximately 16,600 net acres, located in
The PSA closed the
The effective date of acquisition was
The PSA contains representations and warranties of Company and Seller as of specific dates and customary indemnification obligations of the parties, subject to certain limitations and deductibles.
The above summary description of the EPS does not purport to be complete and is qualified in its entirety by reference to the full text of the EPS, which is incorporated by reference as Exhibit 10.1 to this Current Report on Form 8-K. and is incorporated by reference into this Section 1.01.
The Company financed the transaction with cash (
The credit agreement provides for a maximum credit amount of
Under the credit agreement, the revolving loans can be borrowed, repaid and reborrowed up to
Interest on amounts unpaid under the Credit Agreement (including the Acquisition Loan) will accrue at a rate of interest equal to (a) the greater of (i) the prime rate in effect on such day there, and (b) the federal funds rate in effect to date (as determined in the Credit Agreement) plus 0.50%, and an applicable margin of between 0.25% and 1.25% in depending on the use of the amount of the borrowing base (the “Applicable Margin”). If the Company fails to provide a report indicating its proven oil and natural gas reserves as required under the credit agreement, the applicable margin will be 1.25%, regardless of use.
Upon the occurrence of certain Events of Default (as described in the Credit Agreement), unpaid amounts will bear an additional interest of 2.00% per annum. Interest accrued on each revolving loan is payable in arrears on the last day of each month of March, June, September and December.
The Company generally has the right to make prepayments of the borrowings at any time without penalty or premium under the credit agreement. A commitment fee of 0.50% accrued on the average daily amount of the unused portion of the borrowing base is payable in arrears on the last business day of March, June, September and December of each year and the due date.
We are also required to make certain mandatory repayments under the Credit Agreement, in the event that the Borrowing Base decreases below the total amount of loans made by the lenders and/or if, on the last business day of any calendar month, certain required debt ratios required under the credit agreement are not met, there are outstanding amounts due to lenders and the company has consolidated liquid assets greater than
The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Loan Parties and their Subsidiaries, including, without limitation, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other debts, transactions with affiliated companies, as well as dividends and other distributions. In addition, the credit agreement contains financial covenants, tested quarterly, which limit the Company’s total debt/EBITDAX ratio (as defined in the credit agreement) to 3:1 and require that its consolidated current assets/ consolidated current liabilities (as each is described in the credit agreement) to remain at 1:1 or greater.
The terms of the Company’s existing credit agreement are further described in the current report on Form 8-K filed by the Company with the
The above summary description of the Credit Agreement and Increase in Borrowing Base does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement and Letter of Disclosure. Increase in Borrowing Base, which are incorporated by reference herein as Schedules 10.2 and 10.3 to this Current Report on Form 8-K and are incorporated by reference into this Section 1.01.
Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosures and information set forth in Section 2.01 above in connection with the Increase in Borrowing Base and the Acquisition Loan are incorporated by reference into this Section 2.03 in their entirety.
Section 7.01 Disclosure of FD Rules.
Information in response to Section 7.01 of this Form 8-K and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of Section 18 of the Stock Exchange Act of 1934, as as amended (the “Stock Exchange Act”) or otherwise subject to the responsibilities of this Section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or Exchange Act, except as expressly provided by specific reference in such filing. The provision of this report is not intended to constitute a determination by the Company that the information is material or that release of the information is required by FD Regulation.
Item 9.01 Financial statements and supporting documents.
(a) Financial statements of acquired businesses
Financial statements for the acquired assets will be filed no later than 71 calendar days after the date the original Form 8-K was required to be filed.
(b) Pro forma financial information
Pro forma financial information relating to the acquisition of the Acquired Assets will be filed no later than 71 calendar days after the date the original Form 8-K was required to be filed.
Part # Description
10.1# Purchase and Sale Agreement dated
June 29, 2020, by and among U.S. Energy Corp, as Buyer, and ETXENERGY, LLC, as Seller (Filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commissionon June 30, 2022(File No. 000-06814) and incorporated by reference herein) 10.2 Credit Agreement dated as of January 5, 2022, among U.S. Energy Corp., as borrower, Firstbank Southwest, as Administrative Agent and the Lenders party thereto (Filed as Exhibit 10.6 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commissionon January 10, 2022(File No. 000-06814) and incorporated by reference herein) 10.3£ Borrowing Base Increase Letter Agreement dated July 26, 2022, between U.S. Energy Corp.and Firstbank Southwest, as Administrative Agent 99.1¥ Press Release dated July 28, 2022104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
£ Filed as an attachment to the original Form 8-K and incorporated herein by reference.
¥ Provided as an attachment to the original Form 8-K and incorporated herein by reference.
# Certain schedules, exhibits, schedules, and similar attachments have been omitted pursuant to SK Rule 601(a)(5). A copy of any appendix or omitted exhibit will be provided in addition to the
© Edgar Online, source