U.S. Energy Advances Montana Industrial Gas Project Amid Q2 Loss

US Energy Corp posted a Q2 2025 net loss of $6.1 million, accelerating development of its Montana-based Kevin Dome industrial gas project. The company aims for first revenues in 2026 from CO2 and helium production and carbon management initiatives. Three high-deliverability wells have been drilled, with peak rates of 12.2 MMcf/d. The company is transitioning from an oil-and-gas producer to an industrial gas company, with carbon management central to its strategy. Q2 revenue fell to $2.0 million, and adjusted EBITDA came in at negative $1.2 million.

U.S. Energy Corporation (NASDAQ: USEG) has reported its financial and operational results for the second quarter of 2025, highlighting progress in transforming into an integrated industrial gas company. The company posted a net loss of $6.1 million, down from a loss of $1.9 million in the same quarter of 2024. Total revenue for the second quarter decreased to approximately $2.0 million from $6.1 million in the same quarter of 2024, primarily due to asset divestitures and a decline in oil prices. Adjusted EBITDA dropped to negative $1.2 million in Q2 2025, compared to positive $1.1 million in Q2 2024, indicating weakening operational efficiency [1].

The company made significant strides in its Montana project, including the design of a processing facility expected to start generating revenue in mid-2026 through carbon management initiatives and enhanced oil recovery. U.S. Energy Corporation announced substantial potential in its Kevin Dome asset, with a resource report indicating 1.28 billion cubic feet of net helium and 443.8 billion cubic feet of net CO₂ [1].

The company remains debt-free and has $26.7 million in available liquidity, enhancing its ability to pursue growth opportunities. However, the reported financial performance and reduced oil and gas sales suggest a challenging quarter for U.S. Energy. The company's transition to an industrial gas company is evident in its focus on infrastructure development and carbon management initiatives [1].

U.S. Energy Corporation has confirmed substantial resources in its Kevin Dome asset, including 1.28 billion cubic feet of net helium and 443.8 billion cubic feet of net CO₂, establishing it as a key player in the industrial gas sector. The company's approach to carbon management involves CO₂ sequestration, enhanced oil recovery opportunities, and capturing federal carbon credits through its initiatives [1].

Recent insider trading activity and hedge fund investments in U.S. Energy Corporation's stock indicate a level of interest in the company's future prospects. Wall Street analysts have issued a "Buy" rating on the stock, suggesting a positive outlook [1].

References:
[1] https://www.quiverquant.com/news/U.S.+Energy+Corporation+Reports+Q2+2025+Financial+Results+and+Progress+on+Kevin+Dome+Industrial+Gas+Development