With Phase 1 financing secured, the Houston-based company is pivoting from capital raising to construction and operational milestones in Montana.

April 23, 2026

U.S. Energy Corp. (Nasdaq: USEG) announced on April 20, 2026, that it has closed an expanded $20 million senior secured debt facility that, combined with proceeds from its March 2026 equity offering, completes the Phase 1 capital stack for the company’s Big Sky Carbon Hub in Montana. The integrated energy company simultaneously said it is formally suspending further use of its equity line of credit.

Facility Terms Offer Covenant Flexibility

The new facility is priced at the company’s existing borrowing base grid plus 200 basis points, translating to a rate of ABR plus 2.25 percent to 3.25 percent depending on utilization. Key terms include:

• Size: $20 million
• Covenants: No financial covenant testing until March 31, 2027
• Maturity: May 31, 2029
• Prepayment: No penalties

The company has already satisfied customary hedging requirements associated with the facility, with additional hedge details expected in its upcoming quarterly report.

Capital Stack Complete, ELOC Suspended

President and CEO Ryan Smith said the closing, together with the March equity offering, delivers the remaining development capital needed to bring Phase 1 of Big Sky into commercial operations, which are targeted for the first quarter of 2027. He emphasized that the covenant-light structure provides meaningful flexibility and allows the company to step back from its equity line, which management believes had created a perceived dilution overhang for investors.

The equity line of credit — which previously served as a flexible funding tool during earlier development stages — was last tapped on March 2, 2026, with shares issued that day at an average price of $1.16. No draws have occurred since. Previously, U.S. Energy had sold more than 6.5 million shares to Roth Principal Investments under that program for roughly $7.3 million before the suspension.

Operational Milestones Ahead

With financing in place, management’s focus shifts to construction and near-term operational goals. The company continues to pursue commercial discussions with prospective helium offtake partners amid tight global supply conditions, with the execution of a long-term offtake agreement identified as a key near-term catalyst.

U.S. Energy is also advancing two Monitoring, Reporting, and Verification plans submitted to the Environmental Protection Agency for its Class II injection wells — the first such submissions in Montana. Management anticipates EPA approvals during the summer of 2026, an important regulatory step supporting the Section 45Q tax credit framework that underpins the Big Sky economic model.

Company Background

U.S. Energy owns and operates the Big Sky Carbon Hub and the Cut Bank oil field in Montana, generating revenue streams across helium, carbon management, and oil production. The company positions itself at the intersection of critical supply, domestic energy production, and federal energy policy.