As filed with the Securities and Exchange Commission on November __, 2001
Registration No. 333-
Securities and Exchange Commission
Washington, D.C. 20549
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FORM S-3
Registration Statement
Under the Securities Act of 1933
U.S. ENERGY CORP.
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(Exact name of registrant as specified in its charter)
Wyoming
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(State or other jurisdiction of incorporation or organization)
83-0205516
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(I.R.S. Employer Identification No.)
877 North 8th West, Riverton, Wyoming 82501; Tel. 307.856.9271
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(Address, including zip code, and telephone number, including area code,
of issuer's principal executive offices)
Daniel P. Svilar, 877 North 8th West
Riverton, WY 82501; Tel. 307.856.9271
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(Name, address, including zip code, and telephone number of agent for service)
Copies to: Stephen E. Rounds, Esq.
The Law Office of Stephen E. Rounds
4635 East 18th Ave., Denver, CO 80220
Tel: 303.377.6997; Fax: 303.377.0231
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Approximate date of commencement and end of proposed sale to the public: From
time to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering:[ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Title of Each Class Amount of Maximum Aggregate
of Securities Securities Offering Dollar Price Amount
Registration to be Registered Price Per of Securities to of
to be Registered in the Offering Security be Registered Fee
- ---------------- --------------- -------- ------------- --------
Common Stock 250,000 $3.55 $ 887,500.00 $ 222.00
Shares(1)
Common Stock 50,000 $3.00 $ 150,000.00 $ 38.00
Shares(2)
Common Stock 10,000 $3.75 $ 37,500.00 $ 10.00
Shares(3)
Common Stock 25,000 $2.25 $ 56,250.00 $ 15.00
Shares(4)
Total No. Securities
to be Registered 335,000 (5) $ 914,750.00 $ 285.00
Shares
<FN>
(1) Under rule 457(c), registration fee calculations are estimated based on the
market value of the registrant's common stock (Nasdaq National Market
System price on November 9, 2001), which is within 5 business days prior to
the initial filing of this statement. These shares are issued and
outstanding, and are being registered for resale under this registration
statement.
(2) These shares being registered for resale under this registration statement
are issuable on exercise of outstanding warrants, at $3.00 per share.
(3) These shares being registered for resale under this registration statement
are issuable on exercise of outstanding warrants, at $3.75 per share.
(4) These shares being registered for resale under this registration statement
are issuable on exercise of warrants, which the registrant is contractually
obligated to issue to one of the selling shareholders for whom this
registration statement is filed, in the event the average closing bid price
of registrant's common stock for the five consecutive trading days prior to
the effective date of this registration statement is at or less than $2.50
per share. The exercise price of such warrants would be $2.25 per share.
(5) Refer to notes (1) through (4) above.
</FN>
1
DELAYING AMENDMENT UNDER RULE 473(A): The registrant hereby amends this
registration statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall become effective in
accordance with section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the Commission
acting pursuant to section 8(a), may determine.
The information in this prospectus is subject to completion or amendment. The
securities covered by this prospectus cannot be sold until the registration
statement filed with the Securities and Exchange Commission becomes effective.
This prospectus shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any state in
which an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of that state.
U.S. ENERGY CORP.
335,000 SHARES OF COMMON STOCK
This prospectus covers the offer and sale of up to 335,000 shares of common
stock ($0.01 par value) by CAYDAL, LLC and by Kevin P. Daly, both of whom are
shareholders of U.S. Energy Corp. (CAYDAL, LLC holds 200,000 shares, and
warrants to purchase another 50,000 shares, and may be issued warrants to
purchase another 25,000 shares; Mr. Daly holds 50,000 shares and warrants to
purchase another 10,000 shares) (see "Description of Securities"). In this
prospectus (and in the information incorporated by reference), "selling
shareholder" or "selling shareholders" refer to CAYDAL, LLC and Mr. Daly; "we,"
"company," and "USE" refer to U.S. Energy Corp. (and its subsidiaries unless
otherwise specifically stated).
The shares of common stock currently issued to CAYDAL, LLC and Mr. Daly and
the shares of common stock issuable upon exercise of the warrants held by
CAYDAL, LLC and Mr. Daly are offered for sale by these selling shareholders.
The selling shareholders may sell the shares from time to time in
negotiated transactions, brokers' transactions or a combination of such methods
of sale at market prices prevailing at the time of sale or at negotiated prices.
Although we will receive proceeds if and to the extent the warrants are
exercised (50,000 shares at $3.00 per share and 10,000 shares at $3.75 per
share, and 25,000 shares at $2.25 per share if additional warrants are issued to
CAYDAL, LLC, we will not receive any proceeds from sale of any of the shares
offered by CAYDAL, LLC and Mr. Daly (see "Description of Securities"). None of
the warrants have been exercised at prospectus date.
Our common stock is traded ("USEG") on the Nasdaq National Market System.
The closing sale price was $3.35 on October 31, 2001.
AN INVESTMENT IN THE SHARES OFFERED BY THIS PROSPECTUS IS SPECULATIVE AND
SUBJECT TO RISK OF LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 9. THE TABLE OF
CONTENTS ON PAGE 3 SHOWS THE PAGE LOCATION OF EACH RISK FACTOR ADDRESSED IN THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER __, 2001
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TABLE OF CONTENTS
PAGE NO.
Representations About This Offering..........................................4
Forward Looking Statements...................................................4
Summary Information..........................................................4
The Company.........................................................4
The Offering........................................................6
Description of Securities....................................................7
Risk Factors ................................................................9
Risk Factors Involving the Company...........................................9
We Have No Revenues from Coalbed Methane
Production, and Have Not Established Reserves
for Our Coalbed Methane Properties......................................9
Limited Amount of Working Capital, Accumulated Deficit,
and Current and Projected Financial Requirements........................9
We are subject to certain kinds of risk which are unique
to the minerals business...............................................10
Delays in Obtaining Permits for Methane Wells
Could Impair Our Business..............................................10
Terms of subsequent financings may
adversely impact your investment........................................11
Risk Factors Involving This Offering........................................12
Use of Proceeds.............................................................12
Selling Shareholders........................................................12
Plan of Distribution........................................................14
Disclosure of Commission Position on Indemnification........................15
Where to Find More Information About Us.....................................16
Incorporation of Certain Information by Reference...........................16
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REPRESENTATIONS ABOUT THIS OFFERING
We have not authorized anyone to provide you with information different
from that contained in this prospectus. This prospectus is not an offer to sell
nor does it seek an offer to buy the shares in any jurisdiction where this offer
or sale is not permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus (or any supplement), regardless
of when it is delivered or when any shares are sold.
FORWARD LOOKING STATEMENTS
We make statements in this prospectus which are considered to be "forward
looking" statements. Specifically, all statements (other than statements of
historical fact) regarding financial and business strategy and the performance
objectives of management for future operations are forward-looking statements.
These forward-looking statements are based on the beliefs of management, as well
as assumptions made by and information currently available to them. These
statements involve risks that are both known and unknown, including unexpected
economic and market factors, failure to accurately forecast operating and
capital expenditures and capital needs (due to rising costs and/or different
drilling and production conditions in the field), changes in timing or
conditions for getting regulatory approvals to drill coalbed methane wells where
needed, and other business factors. The use of the words "anticipate,"
"believe," "estimate," "expect," "may," "will, "should, "continue," "intend" and
similar words or phrases, are intended by us to identify forward-looking
statements (also known as "cautionary statements" because you should be cautious
in evaluating such statements in the context of all the information in this
prospectus and the information incorporated by reference into this prospectus).
These statements reflect our current views with respect to future events. They
are subject to the realization in fact of assumptions, but what we now think
will happen may be turn out much different, and our assumptions may prove to
have been inaccurate or incomplete.
The investment risks discussed under "Risk Factors" specifically address
some (but not all) of the factors that may influence future operating results
and financial performance. Those investment risks are not "boiler plate" but are
intended to tell you about the uncertainties and risks inherent in our business
at the present time which you need to evaluate before making your investment
decision.
SUMMARY INFORMATION
The following summarizes some of the information found elsewhere in this
prospectus and the information incorporated into it by reference. This summary
is qualified by the more detailed information in this prospectus and the
information incorporated by reference.
THE COMPANY
U.S. Energy Corp. is a Wyoming corporation, formed in 1966, in the business
of acquiring, exploring, developing and/or selling or leasing mineral
properties, and the mining and marketing of minerals. We now are engaged in
three principal mineral sectors: coalbed methane gas, uranium, and gold
(properties and other assets included in the uranium and gold sectors currently
are in care and maintenance status). The most significant uranium properties are
located on Sheep Mountain in Wyoming, and in southeast Utah. We also hold a
royalty interest in claims on Green Mountain, Wyoming, now held by Kennecott
Uranium Company (see below). The gold property is located in Sutter Creek,
California, east of Sacramento. Interests are held in other mineral properties
(principally molybdenum),
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but are either non-operating interests or undeveloped claims. Small oil and gas
operations in Montana and Wyoming are conducted as well. Other business segments
are commercial (real estate and general aviation) and construction operations.
Our fiscal year ends May 31.
The coalbed methane gas business is conducted through Rocky Mountain Gas,
Inc. ("RMG," a Wyoming corporation owned 41.7% by USE and 41.7% by Crested Corp.
(Crested is a 70.5% majority-owned subsidiary of the company, see below)).
Properties of RMG are held in southeastern Montana and north-eastern and
southwestern Wyoming.
USE and Crested Corp. ("Crested") originally were independent companies,
with two common affiliates (John L. Larsen and Max T. Evans). In 1980, USE and
Crested formed a joint venture (referred to as the "USECC") to do business
together (unless one or the other elected not to pursue an individual project).
As a result of USE funding certain of Crested's obligations from time to time
(due to Crested's lack of cash on hand), and later payment of debts by Crested
issuing common stock to USE, Crested became a majority-owned subsidiary of USE
in fiscal 1993. In fiscal 2001, Crested issued another 6,666,666 shares of
common stock to reduce Crested's debt owed to USE by $3.0 million, which
increased USE's ownership of Crested to 70.5%.
All of USE's (and Crested's) operations are in the United States. Principal
executive offices for USE are located in the Glen L. Larsen building at 877
North 8th Street West, Riverton, Wyoming 82501, telephone 307.856.9271; fax
307.857.3050.
Most of the company's (USE's) operations are conducted through
subsidiaries, the USECC joint venture with Crested, and various jointly-owned
subsidiaries of USE and Crested.
Until September 11, 2000, USE and Kennecott Uranium Company ("Kennecott"),
owned the Green Mountain Mining Venture ("GMMV"), which held a large uranium
deposit and uranium mill in Wyoming. On September 11, 2000, USE and Crested
settled litigation with Kennecott involving the GMMV by selling their interest
in the GMMV and its properties back to Kennecott for $3.25 million and receiving
a royalty interest in the uranium properties. Kennecott also assumed all
reclamation obligations on the GMMV properties. Other principal uranium
properties and an uranium mill in southeast Utah are held by Plateau Resources
Ltd., a wholly-owned subsidiary of USE. The Utah uranium properties are also in
a care and maintenance status. At some future date, if the uranium oxide market
improves, USE and Crested may consolidate their remaining uranium assets into a
single subsidiary and finance the startup of its mines and mill operations,
subject to obtaining the necessary debt or equity funding. There are no current
plans to implement this strategy at the present time.
The gold assets held by Sutter Gold Mining Company ("SGMC"), a
majority-owned subsidiary of USE, are also in a care and maintenance status
because the current price of gold does not at this time warrant raising the
capital necessary to put the properties into production.
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THE OFFERING
Securities Outstanding 10,197,254 shares of common stock, $0.01 par
value.
Securities To Be Outstanding 10,282,254 shares of common stock, $0.01 par
value, assuming all warrants held by the
selling shareholders (and the additional
warrants which may be issued to CAYDAL, LLC)
are exercised as of the date of this
prospectus.
Securities Offered 250,000 shares of common stock owned
or to be owned by CAYDAL, LLC which includes:
200,000 shares issued and outstanding plus
50,000 shares issuable upon exercise of
warrants at $3.00 per share, expiring October
24, 2003.
25,000 shares of common stock issuable upon
exercise of warrants (which we are
contractually obligated to issue to CAYDAL,
LLC depending on market price for our stock
on the date of this prospectus, (see
"Description of Securities"). These warrants,
if issued, will have an exercise price of
$2.25 and expire two years after the date of
this prospectus.
60,000 shares of common stock owned or to be
owned by Kevin P. Daly, which includes 50,000
shares issued and outstanding, plus 10,000
shares issuable upon exercise of warrants at
$3.75 per share, which expire October 18,
2003.
Use of Proceeds We will not receive any proceeds from sale of
shares by the selling shareholders, but we
may receive proceeds from exercise of the
warrants, which will be used by the company
for working capital.
Plan of Distribution The offering is made by the selling
shareholders named in this prospectus, to the
extent they sell shares. Sales may be made in
the open market or in private negotiated
transactions, at fixed or negotiated prices.
See "Plan of Distribution."
Risk Factors An investment is subject to risk. See "Risk
Factors."
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DESCRIPTION OF SECURITIES
Common Stock. We are authorized by our articles of incorporation to issue
20 million shares of common stock, $0.01 par value, and 100,000 shares of
preferred stock, $0.01 par value. However, at the December 2001 annual meeting
of shareholders, approval will be sought by management to amend the articles of
incorporation to authorize the issuance of an unlimited number of shares of
common stock. Reference is made to the information in the Proxy Statement for
the December 2001 annual meeting of shareholders incorporated by reference into
this prospectus.
Shares of common stock may be issued for such consideration and on such
terms as determined by the board of directors, without shareholder approval.
Holders are entitled to receive dividends when and as declared by the board of
directors out of funds legally available therefor. There are no restrictions on
payment of cash dividends. Cash dividends have not been declared on the common
stock, although a 1 for 10 stock dividend was declared in November 1990. It is
anticipated that future earnings would be reinvested into operations and not
declared as dividends on the common stock. All holders of shares of common stock
have equal voting rights, and the shares of common stock sold in this offering
will have the same rights. Holders of shares of common stock are entitled to one
vote per share on all matters upon which such holders are entitled to vote, and
further have the right to cumulate their votes in elections of directors.
Cumulation means multiplying the number of shares held, by the number of
nominees to the board of directors, then voting the product among the nominees
as desired. Directors are elected by a plurality of the votes cast.
Shares of common stock sold in this offering are fully-paid and
nonassessable shares of U.S. Energy Corp.
Pursuant to our articles of incorporation and as permitted by Wyoming law,
shares of common stock held by our subsidiaries may be voted by such
subsidiaries as determined by the board of directors of each, in elections of
directors and other matters brought before shareholders.
In September 2001, the company adopted a shareholder rights plan ("poison
pill") and filed the plan with the Securities and Exchange Commission as an
exhibit to Form 8-A. The following three paragraphs briefly state principal
features of the plan, which are qualified by reference to the complete plan,
which is incorporated by reference into this prospectus.
Under the plan, the holder of each share of common stock has the right to
purchase (when the rights become exercisable) from the company one-one
thousandth (1/1,000th) of one (1) share of Series P preferred stock at price of
$200.00 per for each one-one thousandth (1/1,000th) share of such preferred
stock. The purpose of the plan is to deter an unfairly low priced hostile
takeover of the company, by encouraging a hostile party to negotiate a fair
offer with the board of directors and thus eliminate the poison pill.
The rights trade with the common stock and aren't separable therefrom; no
separate certificate for the rights is issued unless and until there is a
hostile takeover attempted, after which time separate and tradable rights
certificates would be issued.
The rights are not exercisable and never can be unless and until a hostile
(not negotiated with the board) takeover of the company is initiated with the
objective of acquiring 15% of the company's voting
7
stock. If before the takeover is launched the hostile party comes to agreement
with the board of directors about price and terms and makes a "qualified offer"
to buy the stock of the company, then the board of directors may redeem (buy
back) the rights for $0.01 each. But, if such a "qualified offer" isn't agreed
upon, then the rights are exercisable for preferred stock, which in turn would
enable to holder to convert the preferred stock into voting common stock of the
company at a price equal to one-half the market price.
Preferred Stock. Shares of preferred stock may be issued by the board of
directors with such dividend, liquidation, voting and conversion features as may
be determined by the board of directors without shareholder approval. In June
2000, we established a Series A Convertible Preferred Stock, for which 1,000
shares of preferred stock are reserved for sale at $10,000 per share. There are
200 shares of Series A stock issued and outstanding. Outstanding shares of
Series A stock accrue interest at 7.5% per year, with dividends payable in cash
(or at the election of the holder, in shares of common stock). Through September
30, 2001 all interest has been paid in cash. Each share of Series A stock is
convertible into shares of company common stock, or into shares of Rocky
Mountain Gas, Inc. ("RMG," a subsidiary of the company). Conversion is mandatory
on the conversion date (on or about June 15, 2002), but the holder may convert
some or all of the Series A stock into either shares of the company or shares of
RMG. If converted to shares of RMG, the conversion rate is one share of RMG for
each $3.00 originally paid to purchase the series A stock from the company, plus
each added $3.00 of accrued unpaid interest on the original series A investment.
If converted to shares of common stock of the company (USE), the conversion rate
is that number of shares as equals the amount originally paid to purchase the
series A stock from the company, divided by the average closing price of the
company's stock on the Nasdaq National Market System for the 10 trading days
preceding conversion date.
Warrants. As of the date of this prospectus, warrants are issued and
outstanding to purchase a total of 299,958 shares of common stock:
o Warrants to purchase 10,000 shares at $3.75 held by the selling
shareholder Kevin P. Daly, issued as of October 18, 2001 and expiring October
18, 2003.
o Warrants to purchase 50,000 shares at $3.00 held by the selling
shareholder CAYDAL, LLC, issued on October 24, 2001 and expiring October 24,
2003.
o In the event the average closing bid price of the common stock as
reported on the Nasdaq National Market System is equal to or less than $2.50 for
five consecutive trading days prior to the date of this prospectus, we are
obligated by contract with CAYDAL, LLC, and we will issue to CAYDAL, LLC,
additional warrants to that selling shareholder to purchase 25,000 shares of
common stock, exercisable until 24 months after the date of this prospectus, at
a price of $2.25 per share. If such warrants are issued because the condition to
issue is met at prospectus date, resale of shares acquired on exercise of these
warrants will be covered by this prospectus.
o Warrants to purchase 67,933 shares at $3.75 held by 18 investors who
purchased shares and warrants in private transactions with the company from June
29, 2001 to October 18, 2001. These warrants were issued as of October 18, 2001
and expire October 18, 2003. Resale of shares acquired on exercise of these
warrants is not covered by this prospectus.
o Warrants to purchase 38,966 shares at $3.75 held by persons associated
with VentureRound Group LLC, which served as the Financial Advisor to the
company in connection with the private transactions from June to October 2001
(see above). These warrants were issued as partial compensation
8
for services provided to the company by the Financial Advisor. These warrants
were issued as of October 18, 2001 and expire October 18, 2006. Resale of shares
acquired on exercise of these warrants is not covered by this prospectus.
o Warrants to purchase 11,034 shares at $3.75 held by members of
VentureRound Group LLC. These warrants were issued for financial consulting
services provided by VentureRound Group LLC. These warrants were issued as of
November 2, 2001 and expire November 2, 2006. Resale of shares acquired on
exercise of these warrants is not covered by this prospectus.
o Warrants to purchase 97,025 shares at prices from $2.62 to $3.64 held by
various persons and entities for services provided to the company in fiscal
years 1998 and 2000, which were issued in fiscal years 1998 and 2000. These
warrants expire at various times, the longest term of which cover 67,025 shares
at $3.64, expiring September 18, 2002. Resale of shares acquired on exercise of
these warrants is not covered by this prospectus.
RISK FACTORS
An investment in our common stock is speculative in nature and involves a
high degree of risk. You should carefully consider the following risks and the
other information in this prospectus (including the information incorporated by
reference) before investing.
RISK FACTORS INVOLVING THE COMPANY
WE HAVE NO REVENUES FROM COALBED METHANE PRODUCTION, AND HAVE NOT
ESTABLISHED RESERVES FOR OUR COALBED METHANE PROPERTIES. Presently we do not
have any wells in production, and we have not drilled and tested enough wells on
our properties to determine if we have economic reserves of coalbed methane in
place. For some properties, we will have to establish at least some reserve
parameters before gas transmission companies will build gas lines to our
properties, and construction of lines will depend also on then-current and
projected market prices for gas. If we have the necessary capital, we may elect
to build our own lines over to existing transmission lines near two of our
properties in the Powder River Basin in Wyoming. We can't sell production until
the lines and associated gathering lines and compression stations are
constructed.
Due to permitting delays in Montana, we may not realize production from the
Castle Rock and Kirby prospects until late 2002 or early 2003. Other properties
located in Wyoming could be in production in early to mid-2002, but production
might be delayed due to market prices for gas.
LIMITED AMOUNT OF WORKING CAPITAL, ACCUMULATED DEFICIT, AND CURRENT AND
PROJECTED FINANCIAL REQUIREMENTS. At August 31, 2001, we had working capital of
$2,039,500, and an accumulated deficit of $29,665,900. In the future, we could
realize cash from liquidation of certain non-core assets, and /or from the
outcome of our litigation with Nukem/CRIC (see our Annual Report on Form 10-K),
although a favorable recovery from this litigation is uncertain as to time or
amount. Our current level of operations, including general and administrative
overhead, mineral operations (primarily care and custody costs for the uranium
and gold properties), costs to comply with other property lease and permitting
obligations are estimated to be $4,500,000 for the eight months ending June 30,
2002. However, if we can't realize cash from liquidating assets or other
sources, under these circumstances additional equity financing may be necessary
to sustain operations starting in early calendar 2002. There are no current
commitments for such future financing as may be necessary.
9
Our strategy for RMG contemplates a total capital budget of up to
$50,000,000 through calendar 2003 to develop our coalbed methane properties and
put them into production, and to acquire more properties. Management believes
the necessary equity and/or debt capital can be raised as needed, however, there
are no commitments presently in place. The cash requirements for our coalbed
methane business are in addition to working capital requirements.
WE ARE SUBJECT TO CERTAIN KINDS OF RISK WHICH ARE UNIQUE TO THE MINERALS
BUSINESS. The exploration for and production of minerals is highly speculative
and involves risks different from and in some instances greater than risks
encountered by companies in other industries. Many exploration programs do not
result in the discovery of mineralization and any mineralization discovered may
not be of sufficient quantity or quality. Also, the mere discovery of promising
mineralization may not warrant production, because the minerals (including
methane gas) may be difficult or impossible to extract (produce) on a profitable
basis.
Profitability of any mining and production we may conduct will involve a
number of factors, including, but not limited to: the ability to obtain all
required permits; costs of bringing the property into production, including the
construction of adequate production facilities; the availability and costs of
financing; keeping ongoing costs of production at economic levels; and market
prices for the metals or hydrocarbons to be produced staying above production
costs. We can't assure you that any of our properties, or properties we might
acquire in the future, contain (or will contain) deposits of minerals or coalbed
methane gas that will be profitable to produce.
In addition, all forms of mineral (and oil and gas and coalbed methane)
exploration and production require permits to have been issued by various
federal and state agencies. See below.
DELAYS IN OBTAINING PERMITS FOR METHANE WELLS COULD IMPAIR OUR BUSINESS.
Drilling and producing coalbed methane wells requires obtaining permits from
various governmental agencies. The ease of obtaining the necessary permits
depends on the type of mineral ownership and the state in which the property is
located. Intermittent delays in the permitting process can reasonably be
expected throughout the development of any play. For example, there is currently
a temporary moratorium for drilling coalbed methane wells on fee and state lands
in Montana. We may shift our exploration and development strategy as needed to
accommodate the permitting process. As with all governmental permit processes,
there is no assurance that permits will be issued in a timely fashion or in a
form consistent with our plan of operations.
On March 16, 2000, the Northern Plains Resource Council, Inc. ("NPRC")
filed suit against the Montana Board of Oil and Gas Conservation (Board)
requesting an order of the court compelling the defendant to prepare a
Supplemental Environmental Impact Statement ("SEIS") for coalbed methane
development, which could further delay development. RMG and others have filed a
motion to intervene to participate in this litigation and to ensure that some
drilling can be performed during any environmental analysis. The Board has
agreed to limit issuance of CBM well permits to 200 pending completion of the
SEIS, currently scheduled to be completed in the spring of 2002.
The Wyodak Environmental Impact Statement (EIS) for the Powder River Basin
in Wyoming issued in the fall of 1999, allowed the permitting of 5,000 CBM wells
to be drilled on Federal lands in Wyoming. More CBM well applications have been
submitted causing the BLM to begin a second EIS for the Powder River Basin Area
in Wyoming. The new EIS was to commence in early summer 2000. Development on
Federal lands in Wyoming has been stopped with the balance of the Wyodak EIS
10
permitted wells (4,000) occurring on fee and state lands. The BLM has started an
environmental assessment ("EA") reviewing drainage issues which could allow an
additional 1,500 new CBM well permits in the same region. This was scheduled to
begin in April 2000 with completion expected October 2000. Completion has been
delayed and is not expected until late 2001 or early 2002. Again, there is no
assurance that the EA and EIS will not negatively impact RMG.
In addition, the Wyoming and Montana Departments of Environmental Quality
have regulations applying to the surface disposal of water produced from coalbed
methane ("CBM") drilling operations. CBM operators are currently seeking changes
in permit requirements and department policy that would allow operators more
flexibility to discharge water on the surface. If these changes are not made, it
may be necessary to install and operate treatment facilities or drill disposal
wells to reinject the produced water back into the underground rock formations
adjacent to the coal seams or lower sandstone horizons. If we cannot obtain the
appropriate permits or if applicable laws or regulations require water to be
disposed of in an alternative manner, the costs to dispose produced water will
likely increase. These costs could have a material effect on operations in this
area, including potentially rendering future production and development in the
affected areas uneconomic.
In Montana, we have pending applications to the BLM for approximately 60
permits to drill into shallow gas sand formations on Federal land held with
Quaneco and would be converted to production status upon receiving approval from
the Montana Board of Oil and Gas. These wells would evaluate potential CBM
production as well as conventional gas. Regarding other acreage held with
Quaneco in Montana, the State of Montana may lift its moratorium for CBM wells
on private and state ground in Montana, and start issuing new permits on these
lands in Spring 2002 (a voluntary moratorium is currently in place for wells on
private and state ground in Montana). We have not determined to what extent we
will participate in this procedure, and are evaluating how best to protect our
position to have reasonable exploration for CBM wells proceed on state and fee
ground. We have permits in place until Spring 2002 in order to conduct
exploration in expectation that commercial production will be approved on
completion of the EIS and EA.
In August 2001, Montana and Wyoming announced an agreement for water
quality officials in both states to coordinate monitoring of water flows in the
Powder River and Little Powder River drainages, to determine the impact of
coalbed methane well water production on river water. Although usually well
water is potable, it may contain high sodium absorption ratios which can impair
use of the water for irrigation purposes in clay-based soils. The respective
agencies will propose regulations to establish thresholds for potential
pollutants and require strict monitoring by local water quality officials. If
test results indicate well water flows adversely impact river water quality,
operators could be required to put the water flow into holding ponds or take
other steps to eliminate or reduce water flows or pollutants in the water.
Implementation of the agreement is expected to benefit continued coalbed methane
development in these areas by opening up the water discharge permitting process
in the affected areas, which had been slowed because of these concerns.
Currently, we don't have acreage which would be impacted by these regulations
but future acreage could be acquired in the affected areas. It is possible that
water from some of our future wells could be regulated as to discharge, which
could negatively impact development of that acreage.
TERMS OF SUBSEQUENT FINANCINGS MAY ADVERSELY IMPACT YOUR INVESTMENT. We may
have to raise equity, debt or preferred stock financing in the future. Your
rights and the value of your investment in the common stock could be reduced.
For example, if we have to issue secured debt securities, the holders of the
debt would have a claim to our assets that would be prior to the rights of
stockholders until
11
the debt is paid. Interest on these debt securities would increase costs and
negatively impact operating results. Preferred stock could be issued in series
from time to time with such designations, rights, preferences, and limitations
as needed to raise capital. The terms of preferred stock could be more
advantageous to those investors than to the holders of common stock. In
addition, if we need to raise more equity capital from sale of common stock,
institutional or other investors may negotiate terms at least and possibly more
favorable than the terms of this offering. Shares of common stock which we sell
could be sold into the market, which could adversely affect market price. See
below.
RISK FACTORS INVOLVING THIS OFFERING
ADDITIONAL SHARES TO MARKET BY REGISTRATION OR EXCHANGE. From time to time
we have funded operations by selling restricted securities of subsidiary
companies for their operations, then later reacquired those securities by
exchange for shares and warrants of USE. For example, we sold approximately
$3,166,500 of common stock in RMG (and $2,000,000 of preferred stock in USE), a
significant portion or all of which may be exchanged for shares of common stock
of USE in calendar 2001 or early 2002, based on USE stock market prices at
exchange date, and then registered for resale into the public market. Also, in
calendar 2001 we have sold restricted securities of USE (339,667 shares and
warrants for 117,993 shares), and late in calendar 2001 or early in 2002 we will
register the resale of the shares (and any shares acquired on exercise of
warrants) into the public market. Such resales could adversely affect market
prices for investors who buy shares in this offering.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling shareholders pursuant to this prospectus, but we may receive proceeds
from the exercise of the warrants (pursuant to which the underlying shares of
such warrants will be sold pursuant to this prospectus), which will be used by
the company for working capital.
SELLING SHAREHOLDERS
This prospectus covers the offer and sale by the selling shareholders of up
to 335,000 shares of common stock ($0.01 par value) by CAYDAL, LLC and by Kevin
P. Daly, both of whom are shareholders. Mr. Daly owns 90% of CAYDAL, LLC; the
minority owner is not an affiliate of the company or any entity or person who
has conducted business with the company.
Of the shares covered by this prospectus, 60,000 are owned by or issuable
to Mr. Daly on exercise of warrants. Mr. Daly bought from the company 50,000
shares for $150,000 in August 2001. Warrants to purchase 10,000 shares of common
stock (at $3.75 per share) were issued on October 18, 2001. This purchase was
made in the company's private placement of equity securities to accredited
investors, through a financial advisory firm and broker-dealer. The company paid
a commission of 10% cash and issued warrants to purchase shares at $3.75 per
share (for 38,966 shares, equal to 10% of the shares sold to the investors in
the private placement) to the financial advisory firm for its services in the
private placement. The private placement was completed October 18, 2001.
The remaining shares covered by this prospectus are comprised of 200,000
shares currently issued and outstanding and an additional 75,000 shares issuable
upon the exercise of warrants. Of these securities, 200,000 shares, and warrants
to purchase 50,000 shares (at $3.00 per share), were purchased from the company
on October 23, 2001 by CAYDAL, LLC in a transaction negotiated between Mr. Daly,
12
as manager and principal owner of CAYDAL, LLC, and the company. No commission
was paid in connection with this transaction. As part of the transaction, the
company agreed that in the event the average closing bid price of the common
stock as reported on the Nasdaq National Market System is equal to or less than
$2.50 for five consecutive trading days prior to the date of this prospectus,
the company will be obligated (by the terms of the subscription agreement for
the October 23, 2001 transaction with CAYDAL, LLC), and the company will issue
to CAYDAL, LLC as of the date of this prospectus, additional warrants to
purchase 25,000 shares of common stock, exercisable until 24 months after the
date of this prospectus, at a price of $2.25 per share. If such warrants are
issued, resale of shares acquired on exercise of these warrants, in addition to
shares acquired on exercise of the other warrants held by the selling
shareholders, will be covered by this prospectus.
The selling shareholders may offer their shares for sale on a continuous
basis pursuant to rule 415 under the 1933 Act.
The following information has been provided to us by the selling
shareholders. All numbers of shares, and percentage ownership, are stated on a
pro forma basis as of prospectus date assuming issuance of 50,000 shares upon
exercise of warrants held by CAYDAL, LLC and warrants held by Kevin P. Daly, as
well as issuance of an additional 25,000 shares upon exercise of warrants which
may be issued to CAYDAL, LLC, which warrants may be issued to CAYDAL, LLC if the
average closing market price for our stock for the five consecutive trading days
before prospectus date is at or below $2.50 per share. There are 10,282,254
shares issued and outstanding on this pro forma basis as of prospectus date;
potential exercise of other warrants and options are not reflected in this pro
forma share number.
Number of Number of Shares
Shares of of Common Stock Percent Owned
Name and Address Common Stock Registered Prior to After
of Beneficial Owner Owned For Sale Offering(1) Offering(1)
- ---------------------------------------------------------------------------------------------------
CAYDAL, LLC 275,000(2) 275,000(2) 2.7% -0-
410 Marion Street
Denver, Colorado 80218
Kevin P. Daly 60,000(3) 60,000(3) * *
410 Marion Street
Denver, Colorado 80218
<FN>
* Less than 1%.
(1) Assumes all shares are sold by the selling shareholder.
(2) Assumes issuance of 50,000 shares of common stock upon exercise of
warrants, and issuance of an additional 25,000 shares upon exercise if
additional warrants are issued.
(3) Assumes exercise of 10,000 shares of common stock upon exercise of
warrants.
</FN>
The shares owned or to be owned by the selling shareholders are registered
under rule 415 of the general rules and regulations of the Securities and
Exchange Commission, concerning delayed and continuous offers and sales of
securities. In regard to the offer and sale of such shares, we have made certain
undertakings in Part II of the registration statement of which this prospectus
is part, by which, in general, we have committed to keep this prospectus current
during any period in which the selling shareholders make offers to sell or sell
the covered securities pursuant to rule 415.
13
PLAN OF DISTRIBUTION
The selling shareholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
Selling shareholders also may resell all or a portion of the shares in open
market transactions in reliance upon rule 144 under the 1933 Act, provided they
meet the criteria and conform to the requirements of such rule.
The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in securities of the company or
derivatives of company securities and may sell or deliver shares in connection
with these trades. The selling shareholders may pledge their shares to their
brokers under the margin provisions of customer agreements. If a selling
shareholder defaults on a margin loan, the broker may, from time to time, offer
and sell the pledged shares. The selling shareholders have advised the company
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their shares other
than ordinary course brokerage arrangements, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling shareholders.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
14
We are required to pay all fees and expenses incident to the registration
of resale of the shares covered by this prospectus. However, all discounts,
commissions or fees incurred in connection with the sale of the shares offered
hereby will be paid by the selling shareholders. The company has agreed to
indemnify the selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the 1933 Act. We have been advised that
in the opinion of the Securities and Exchange Commission, indemnification for
liabilities under the 1933 Act is against public policy, and therefore is
unenforceable. See below.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and complied with.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
company pursuant to the foregoing provisions, or otherwise (for example, in
connection with the sale of securities), we have been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the 1933 Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the company of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Securities Act, and will be
governed by the final adjudication of such issue.
15
WHERE TO FIND MORE INFORMATION ABOUT US
We have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 under the 1933 Act with
respect to the shares offered by this prospectus. This prospectus, filed as a
part of the registration statement, does not contain certain information
contained in part II of the registration statement or filed as exhibits to the
registration statement. We refer you to the registration statement and exhibits
which may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates. The
registration statement and exhibits also are available for viewing at and
downloading from the EDGAR location within the Commission's internet website
(http://www.sec.gov).
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Our common stock is registered with the Commission under section 12(g) of
the Securities Exchange Act of 1934 (the "1934 Act"). Under the 1934 Act, we
file with the Commission periodic reports on Forms 10-K, 10-Q and 8-K, and proxy
statements, and our officers and directors file reports of stock ownership on
Forms 3, 4 and 5. These filings may be viewed and downloaded from the
Commission's internet website (http://www.sec.gov) at the EDGAR location, and
also may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates.
Information on the operation of the Public Reference Room can be obtained by
calling the Commission at 1.800.SEC.0330.
All of the information contained in the following documents filed with the
Commission is incorporated by reference into this prospectus: Annual Report on
Form 10-K for fiscal year ended May 31, 2001; Quarterly Report on Form 10-Q for
the Three Months ended August 31, 2001; Proxy Statement for Annual Meeting of
Shareholders in December 2001; and Report on Form 8-K in fiscal (reporting
adoption in calendar 2001 of a "shareholder rights plan" also commonly known as
a "poison pill").
All of the information which will be contained in our future Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statements, and Reports on
Form 8-K, and any other filings we make pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act, all after the date of this prospectus, also are
incorporated by reference into this prospectus as of the dates when such
documents are filed with the Commission.
We will provide to you copies of any or all of the information in these
documents, and any exhibits to them, without charge, upon request addressed to
U.S. Energy Corp., 877 North 8th West, Riverton, Wyoming 82501, attention Daniel
P. Svilar, Assistant Secretary. You also may request these documents by
telephone: 307.856.9271. Our internet address is www.useg.com. Our 1934 Act
filings are not directly available through our internet address (website), but
such filings can be accessed through the link to Nasdaq at our internet address
(website).
16
335,000 SHARES COMMON STOCK
U.S. ENERGY CORP.
-------------------
PROSPECTUS
--------------------
November __, 2001
No dealer, salesman or other person is authorized to give any information
or make any information or make any representations not contained in the
prospectus with respect to the offering made hereby. This prospectus does not
constitute an offer to sell any of the securities offered hereby in any
jurisdiction where, or to any person to whom it is unlawful to make such an
offer. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that there has been no
change in the information set forth herein or in the business of our company
since the date hereof.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
securities being registered:
Securities and Exchange Commission registration fee...................$ 231
National Association of Securities Dealers, Inc. examination fee...... n/a
Accounting ........................................................... 2,000
Legal fees and expenses............................................... 5,000
Printing ............................................................. 300
Blue Sky fees and expenses (excluding legal fees)..................... 1,000
Transfer agent ....................................................... n/a
Escrow agent.......................................................... n/a
Miscellaneous......................................................... 1,484
Total.................................................................$ 10,000
The Registrant will pay all of these expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
18
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
SEQUENTIAL
EXHIBIT NO. TITLE OF EXHIBIT PAGE NO.
- ----------- ---------------- ----------
Exhibit 4.1 - 4.8 Intentionally left blank
Exhibit 4.9 Warrant (held by CAYDAL, LLC) ..........................22
Exhibit 4.10 Warrant (held by Kevin P. Daly) ........................33
Exhibit 4.11 Warrant (which may be issued to CAYDAL, LLC
by contractual obligation depending on market
price of registrant's stock on effective date) .........44
Exhibit 5.1 Opinion re legality and consent of counsel ..........55
Exhibit 23.1 Included in Exhibit 5.1
Exhibit 23.2 Consent of Independent Auditors (Grant Thornton LLP)....57
Exhibit 23.3 Consent of [former] audit firm Arthur Andersen LLP......58
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than twenty percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
19
(iii) To include any additional or changed material information on the
paln of distribution.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply to this
registration statement if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that for purposes of determining
any liability under the Securities Act , each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) RELATIVE TO REQUEST FOR ACCELERATION OF EFFECTIVE DATE.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Riverton, state of Wyoming on November 9, 2001.
U.S. ENERGY CORP. (Registrant)
Date: November 15, 2001 By: /s/ John L. Larsen
----------------------------------
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this registration statement on Form S-3 has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Date: November 15, 2001 By: /s/ John L. Larsen
---------------------------------
Director
Date: November 15, 2001 By: /s/ Keith G. Larsen
---------------------------------
Director
Date: November 15, 2001 By: /s/ Harold F. Herron
---------------------------------
Director
Date: November 15, 2001 By: /s/ Don C. Anderson
---------------------------------
Director
Date: November 15, 2001 By: /s/ Nick Bebout
---------------------------------
Director
Date: November 15, 2001 By: /s/ H. Russell Fraser
---------------------------------
Director
Date: November 15, 2001 By: /s/ Robert Scott Lorimer
---------------------------------
Principal Financial Officer/
Chief Accounting Officer
21