U.S. Energy (NASDAQ:USEG) executives used a recent investor presentation to outline what they described as a near-term development “inflection point” for the company’s Montana asset base, centered on helium production, carbon capture utilization and sequestration (CCUS), and an oil enhanced recovery strategy. Management said the company has filed a new investor presentation and expects a sequence of milestones over the next 9 to 12 months leading into initial commercialization activity beginning in 2027.
Montana asset base and “three-pillar” strategy
Management emphasized that U.S. Energy controls a large, fully owned and operated position in Montana with minimal third-party dependencies. The company framed its opportunity around three revenue “pillars”: helium, CO2/carbon management, and oil. In describing the resource base, the presenter cited an engineering report prepared by Ryder Scott, which management characterized as a leading engineering firm, and pointed to estimates including 1.3 billion cubic feet of helium and roughly 440 billion cubic feet of CO2 in the ground, along with what it described as a large proven oil basin.
Phase one economics, timeline, and permitting
For an initial “phase one” development, management cited a $92 million value associated with federal 45Q tax credits over the first 12 years, and said the project is designed to produce about 125,000 metric tons per year of utilized and sequestered CO2. In the presentation, management referenced monetizing CO2 at $85 per ton under 45Q, which it said provides a firm pricing framework and increases by roughly 3% per year over the 12-year credit period.
Management said the company has invested about $22 million of its own capital into the project to date and described an expected roughly $15 million annual EBITDA run rate that it characterized as “up and to the right” as development continues. It also said it has more than 170 permitted Class II injection wells and expects helium production of about 12 million cubic feet per year.
On timing, management indicated construction is expected to begin ahead of first-quarter 2027, when it expects helium sales, carbon management operations, and EOR activity to begin. The company also discussed Monitoring, Reporting, and Verification (MRV) filings with the U.S. Environmental Protection Agency, saying two MRVs have been filed and are discussed with the agency “every few weeks,” with approvals expected in summer 2026. Management said that once approved, the company expects to be the only entity in Montana holding those permits.
Market positioning and valuation framing
Management argued the company has “five structural advantages,” focusing on asset geology and location, existing oil cash flow, oil optimization potential, first-mover positioning in an emerging CCUS market, and exposure to helium demand tied to aerospace, semiconductor manufacturing, and medical devices.
In a valuation discussion, management said U.S. Energy has legacy reserve value across oil, helium, and CO2 of about $100 million “even before” development. It also stated that the company trades at roughly 2.5x enterprise value to management’s estimated 2027 EBITDA and at what it called a “significant discount” to net asset value. Management contrasted that with what it described as valuation outcomes for comparable transactions and standalone companies, citing “7–12 times” ranges.
CCUS scale, logistics, and CO2 commercialization
In outlining its “Big Sky Carbon Hub,” management said the structure is heavily permitted, with about 90% of permits completed and the remainder pending. It said the phase one volume of approximately 125,000 metric tons per year could scale to about 300,000 metric tons annually without additional capital, based on existing infrastructure.
Executives also highlighted transportation access, citing a major east-west rail line running through the property (BNSF), additional north-south rail connectivity, interstate corridors, and trucking access. Looking beyond sequestration and utilization, management said it also intends to sell produced CO2 in the future, arguing that the industrial liquefied CO2 market is “structurally short” and could represent another expansion opportunity.
Oil EOR plan and near-term catalysts
Management described a large oil field roughly 15 miles from the helium and CO2 resource and said it believes CO2 EOR could materially increase production without significant incremental capital spending on traditional oil development. It described a three-phase approach that begins with 3D seismic and petrophysical analysis, followed by reservoir “repressuring” with CO2 and later expanding injection and operations.
Near-term catalysts cited by management included:
- Executing a long-term helium offtake agreement with a large company
- Initiating processing plant construction
- Advancing permitting and receiving approvals, including MRV approvals expected in summer 2026
- Completing certain infrastructure items
- Adding third-party carbon management partnerships
- Reaching first helium sales next year, ahead of broader commercialization in 2027
During Q&A, management said it sees opportunities both in executing its current development plan and pursuing potential M&A or partnerships, ranging from large companies seeking access to its assets to smaller companies. On helium economics, it said operating costs are relatively low given the gas stream characteristics, with the primary cost being capital for processing and infrastructure. Management described initial helium revenues as likely “modest,” in the low millions of dollars, with growth over time as development expands, while remaining the third-largest revenue stream in its model.
About U.S. Energy (NASDAQ:USEG)
U.S. Energy Corp. (NASDAQ: USEG) is an independent oil and natural gas exploration and production company that acquires, develops and operates hydrocarbon properties across onshore regions in the United States. The company’s activities encompass geological evaluation, drilling, completion and working-interest management, with an emphasis on cost-efficient development of discovered reserves and maximizing production from existing assets.
Over time, U.S. Energy has pursued growth through disciplined lease acquisitions, joint-venture partnerships and targeted drilling programs.
