- US Energy Corp. (NASDAQ: USEG) entered into definitive purchase and sale agreements with several entities controlled by Sage Road Capital, LLC.
- Marine Petroleum Trust Units of Beneficial Interest (NASDAQ: MARPS) rose 18.82 percent Tuesday, apparently on OPEC’s decision to boost output.
- US Energy stock rose 16% in a month, and Marine stock gained 17% in the same period.
US Energy Corp. (NASDAQ: USEG) was up 1.64%, and Marine Petroleum Trust Units of Beneficial Interest (NASDAQ: MARPS) rose 18.82% in intraday trading on Tuesday after OPEC stuck to its earlier decision to keep the output steady at 400,000 barrels per day.
The anticipation of higher oil prices may have led these stocks to rise. The USEG traded at US$4.7976, while MARPS traded at US$5.9647 at 12:40 pm ET.
Here we explore the recent developments of the two companies.
US Energy Corp.
US Energy on Tuesday entered into a definitive purchase and sale agreement with several entities controlled by Sage Road Capital, LLC.
A total of US$99.5 million is considered based on USEG’s closing stock price on Oct 1. The company will issue 19,905,736 shares of common stock and pay US$1.25 million in cash. The balance of US$3.3 million will remain as debts from the seller companies.
The stock has been volatile lately but has increased 16% in one month.
The Houston, Texas-based USEG is an independent energy company engaged in acquiring and developing US oil and natural gas properties.
During the quarter ended June 30, 2021, the company produced 32,073 BOE (One barrel of oil equivalent). In addition, oil contributed 75 percent of the total production in the quarter. The overall production increased by around 130 percent compared to the June quarter of 2020.
The company had US$6.6 million in cash and no debt as of June 30, 2021.
Its revenue was US$1.7 million compared to US$0.2 million in the corresponding quarter of 2020. The net loss was US$0.21 million against a net loss of US$3.7 million a year ago.
The company has a market cap of US$22.59 million. The stock closed at US$4.72 on Oct 4, 2021.
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Marine Petroleum Trust
The stock gained around 18 percent in intraday trading on Tuesday following expectations of increasing oil and gas prices. MARPS is a royalty trust. It provides administration and liquidation payment rights from oil and gas leases in the Gulf of Mexico.
The stock of this Dallas, Texas-based company has been rising since Sep 30, rising around 20 percent based on the closing price of US$5.02 on Oct 4. The stock gained 17% in a month.
For the FY ended June 30, 2021, the company earned approximately 94 percent of royalty revenue attributable to the sale of oil and the remaining 6 percent from the sale of natural gas.
The revenue from oil royalties was US$362,751 in fiscal 2021 and US$23,905 from gas royalties, making the total royalty revenue of US$386,656.
The total revenue was US$773,828 in the fiscal year ended June 30, 2020.
Its net income was US$162 thousand for FY 2021 compared to US$574 for FY 2020.
MARPS’s market capitalization is US$11.3 million. Its dividend yield is 5.53 percent, with an annualized dividend of US$0.257. The last dividend of US$0.064312 was paid on Sep 28.
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On Monday, OPEC and its partner countries supported a gradual increase in oil supplies instead of a sharp rise in production despite growing global demand. It backed its earlier decision to keep the production at 400,000 barrels per day until April next year. Experts believe oil prices may increase further with the increasing oil demand globally.